KUALA LUMPUR, Feb 24 — Shares of UWM Oil & Gas Corporation Bhd, which saw its pre-tax profit for 2015 slip into the red for its 2015 financial year, were traded lower today.
At 10.10am, the share price eased five sen to RM1 with 275,600 shares traded.
“The group’s earnings outlook in 2016 remains bleak with the Naga 6 contract expected to expire in the second quarter of this year, potentially putting further strain on the group’s earnings,” Hong Leong Investment Bank Research said today.
Prospects for securing a new rig contract remain uncertain with Petronas looking to reduce its capital expenditure further, it said.
In the current oversupplied rig market, the research house also opined that charter rates and utilisation rates could remain low in the near term until a sustainable oil price recovery is seen.
UWM posted a pre-tax loss of RM349.39 million for the year ended Dec 31, 2015 compared with a pre-tax profit of RM284.156 million in 2014. Revenue also dropped to RM839.52 million compared with RM1.01 billion previously.
The research house is maintaining its “sell” call on UWM with unchanged target price of 69 sen. — Bernama
