Tanjung Offshore (TOFF) announced that its wholly-owned
subsidiary, Tanjung Kapal Services Sdn Bhd, has been served
with a notice of claim by Newfield Peninsula Malaysia Inc
(Newfield) for damages to pipeline allegedly caused by one
of TOFF’s vessels at the East Belumut Field, off Terengganu.
The USD15.9m (c.RM49m) claim was mainly for costs
associated with the repair and clean up of the damages to
the pipeline.
We are surprised by the announcement as when the news
of the damaged pipeline first broke out, we did a check
with the marine operators under our coverage and none
admitted to their vessels being involved in the incident.
Provision could be made but details remain sketchy as
investigation on the incident is still on-going. We would relook
into the impact on earnings once more details are
made available.
We maintain our Hold call on TOFF with TP of RM1.60/share
is pegged to 12x FY11F earnings, based on TOFF’s
normalised historical valuation. Valuation seems high at 14x
PE (diluted EPS) against peers’ average of 10x. TOFF is also
trading at a premium to the much larger and more liquid oil
& gas companies that are trading at FY11F PE of 12x.
No comments:
Post a Comment