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Wednesday, November 19, 2014

Deleum shares up following net profit jump


KUALA LUMPUR: Shares of Deleum Bhd rose at mid-morning on Tuesday after posting a stellar net profit for its third quarter ended Sept 30, 2014.

At 11.13am, its shares surged 11 sen to RM1.80 with 307,600 shares done between RM1.70 and RM1.81.

The FBM KLCI was up 3.58 points to 1,810.06. Turnover was 541.97 million shares valued at RM418.25mil. There were 286 gainers, 253 decliners and 296 counters unchanged.

Deleum's net profit jumped 17.2% to RM16.8mil from RM14.3mil, but the company said it is “cautious” about its prospects amid plunging oil prices in the international market.

The company said its revenue jumped 73% to RM188.3mil in the third quarter against RM108.8mil a year ago boosted by improvements in all three divisions, namely power and machinery, oilfield services, and maintenance, repair and overhaul (MRO).

Alliance Research has kept a Hold call on the stock with a target price of RM1.90 pegged to 11 times FY15F price per earnings based on small cap average valuation.

It said that Deleum has clear earnings visibility given its RM4bil orderbook.

"Key contracts in the orderbook are long term service agreements for maintenance and repair of gas turbines, as well as slick line services which have contract lengths of five to ten years," it noted.

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