Post removed.Why?

Estimated revenue (FY2019) of Public Bank is RM9.3b which is ridiculous. According to existing order books, only RM3.4b (E&C and Drilling) will be recognised in FY2019 plus RM1.0b (Estimated) from Energy so total estimated revenue should be RM4.4b. But of course, there may some new order coming in this year, but all new project's revenue will be spread over few years, and the revenue will be based on completion stage. I really dont understand how Public Bank can get such a high estimated revenue of RM9.3b.

Public bank always come with its highest target price with their optimistic.LOL

http://www.theborneopost.com/2018/02/13/mmhe-ends-fy17-with-a-bang-at-rm53-9-million-in-core-net-profit/

Another source said that MMHE is in front runner of such project instead of Sapura Energy.

The contract value of Pan malaysia T&I is much lower than my expectation if compared to the previous contract value of RM10 billion (2 years contract).

haiz...., why IOIPG not choosing eright option???? It is more convenient, cost saving and time saving as well. Very disappointed.

From the message of FED, they will further raise up the interest rate in 2017 which means USD will keep going up. If USD keep going up, the oil price will theoretically going down because the crude oil is trading at USD and you can buy more if USD keep strengthening. SKP should feels thankful if the target of demand = supply can be achieved in 2017. If the shale oil come back, then can say bye bye to SKP.

For my opinion, 2017 will be tough year for SKP as the capital expenditure still remain low during the year and the first gas of SK310 B15 field will be expected on 4QCY2017 which mean only little contribution to the Financial year ended 31 Jan 2018.

SHQuah, if hot money flows back to US, do you think EPF, tabung haji have the ability to support the market by them alone? LOL

How many malaysia citizen will look at the share index? Are they judge the government by looking at KLCI?? Are u kidding me? Why not they spend money like BRIM so that voters can benefit directly rather than spend money into share market.

Most of SKP borrowing is USD. If USD going up, they have to pay more even thought they earn USD too.

Oil is trading in USD. If the USD is going up tomorrow, are you willing to buy now??? Mean if you buy oil tomorrow, you can buy more oil with less money spend. This reason will reduce the demand of oil but of course this is just a theoretical and one of the factors to influence the oil price.

USD going up mean oil price will going down because USD is one of the factor to influence the oil price.

The government save their money first rather then reduce the gasoline retail price. Now, they are losing their income from oil industry but save money from gasoline subsidy.

That is because there is no more subsidy provided and that's why you can't compare the gasoline price when the crude oil price stand at US$100 (with subsidy) and US$50 (no subsidy) directly. Government subsidized the gasoline price when crude oil stand at high level, but when the crude oil price start dropping at Oct 2014, the gasoline price remain unchange, the reason is Government reduce its subsidy rather than keep the same amount of subsidy and reduce the gasoline price. When the crude oil price dropped to the lowest, the gasoline price only reduce lesser, that is because government cancel all subsidy to gasoline. Overall, the effect of drop of crude oil will reduce the subsidy first then reduce the retail price of gasoline.

In my opinion, the Government is running out of money. They will subsidies again only when the crude oil price fly high.

The average price range increased from US$43-US$48 (Sep) to US$47-US$51(Oct). So the oil price trend was go up from Sep to Oct then the increase of gasoline is seems reasonable. Please think twice before you judge like keyboard warrior of facebook. Actually do u know Malaysia is using monthly waighted average price to decide the price of next month???

At least good results never bring you to Holland. Don't forget oil price is breaking $50 last month if I'm not wrong then went down again to $42 because all factor other than supply-demand balance were not sustainable. Political uncertainty is unpredictable. We can't just hope there will be bomb attack or war in the future. Forecast on supply and demand is safer for O&G company. Another important factor is US interest hike which will pull down the oil price in the future as interest hike is unavoidable.

As what i have said, I'm focus on the stability of oil price, not the fluctuation on daily or weekly.

"If SKP has no relationship with oil price". Please explain why SKP dropped from RM4 to Rm1.5. Why huge impairment was recognised on last year? Is because the oil price dropped, the discounted cash inflows affected, therefore impairment losses incurred for Oil and gas properties of SKP.

What I care is the stability of oil price, the NOC will invest more in capex only when the oil price stable. And major factor is the demand and supply.

The O&G cycle is oil price drop and fluctuate, Upstream player cut capex, downstream player loss contract. If oil price increase and stable, then Upstream player will invest more, downstream player will take benefit.

My opinion is correlation between oil price and O&G player is very high. Unless you tell me SKP is not a O&G player. And maybe you can tell me, what should we consider when invest in SKP instead of oil price???

Mean Iraq's production allocation will be lesser if secondary date of output adopted by OPEC.

Iraq said their actual output is 4.7m barrels per day but the secondary data states Iraq's output is 4.4m barrels per day only. And OPEC will based on 4.4m to discuss the production allocation. Iraq will lose 1m barrels output per year and that is why they feel unfair to adopt the secondary data method.

http://www.todayonline.com/business/iraq-questions-opec-method-oil-output-estimates

See, Iraq start complaining already...

The reason of share price flying today mainly due to two reasons:
1) Crude oil price (production cut agreement)
2) Window dressing of 3rd quarter end

For production cut agreement of OPEC, can we really rely on this factor??? They are just playing trick. Yesterday, Iran not willing to cut and not even freeze their production and today they reached agreement to cut 700,000 plus barrels per day. Who is going to sacrifice their production and market share. No agreement is reached for this individual production allocation. Please be mindful that Saudi Arab and Iran is aggressive to each other.

Every weeks, sure someone said the SKP will flying here and there, bla bla bla. It is just funny without look into the fundamental of SKP.

It's quarterly results is improved if compared to same quarter of last year is because same quarter of last year had take in account the one off impairment of 500m. So we can't simply compare the figure. As what we see from this quarter result, some information is important as below:
1) EPCIC business: worsen than 1Q2017. Looking forward for the Pan Malaysia T&I projects.
2) Drilling: worsen than 1Q2017 due to the lower utilisation of drilling rigs. If I'm not miscounted, there was 9 rigs are idled out of 18 rigs.
3) Energy: perform better than 1Q2017 as the oil realisation price of 2Q is higher than 1Q2017. Should able to maintain if the uplift volume and oil price are stable.
4) Borrowing increased if compared to 1Q2017.
5) Order books value decreased to RM17B. High competition for EPCIC and Drilling contracts.
6) Positive operating cash inflow and increase in cash.

IF SKP can survive from this crisis, I believe SKP will be better due to its diversified portfolio of integrated business and SKP is for long term investment.

Better observe first, due to the following reason:
1) The production allocation to individual opec members is not set yet. Who is going to sacrifice their production and market share???
2) Are they binding to the agreement? No one know they actual output.
3) If the oil price fly high, how about the shale oil producers? Are they coming back?
4) Big National Oil Company will start to invest into new project only when the price is stable. Even the price fly up to US55 per barrel in October, NOC will still observe the market until the price is stable.

No hope at all. The secretary of OPEC said the Sep meeting is for discussion, not for decision making on output freeze.

All eight drilling assets are under warn stacked condition which mean no revenue generated from them but full crew are maintained. Next quarter sure loss already.

When the knife is falling, do not simply catch it. If not, just like MAS, bring you to Holland. LOL

JoshuaMS7, the US storage dropped probably due to the storm of Gulf of Mexican and it affect the drilling activity of that area.

All these contract awarded are within the expectation as SKP need new contract of RM5b per year to keep them busy. As at today, new contract value only RM3b plus. Therefore, all contract awarded is not bringing any material impact to share price. The contract winner of Pan Malaysia Transportation and Installation will be announced by Petronas in this year end and the contract value should be few billion. SKP is the potential winner for some of package of the contract.

Four of six derrick lay vessel (Sapura 3000, 2000, 900 and LTS 3000) are all anchored at Singapore. Hopefully some contract can keep coming, if not these vessel will keep idle all the way. Haiz...

I have no doubt about SKP ability to win the contract for EPCIC division but my concern is the profit margin of those contract and drilling division. No drilling contract awarded/extended recently which means tender rigs' utilisation will drop significantly and impairment may be considered for drilling assets because half of drilling contract will be expired as at 31 Jan 2017 and will be stacked (idle) after that.

Agree with Boost...Saudi Arab and Iran try to push up their production to highest record before the meeting so that they can have buffer areas when they try to freeze or reduce production. You all can see how determine they are to freeze production. LOL. They thought other countries are stupid. I do not expect they can reach mutual agreement on output because none of them willing to sacrifice their market share. Even they agree to freeze the output but the output is at highest record mean supply still over the demand.

This news has no impact to SKP at all.

SKP is good company with good ability to win contracts, diversified business model(EPCIC,drilling and Energy), positive cash flows. But it is only for long term investor because the reduction of its margin and lower utilisation of drilling assets. It will rebound in the future only when O&G sector recover and adapt at lower oil price and the balance between supply and demand. When the oil price stable, it is enough for National Oil Company to increase its capital expenditure. So please do not expect the oil price will go back to US$100. Stabled at US$50-US$60 is enough for most of NOC to invest.

SKP also is a upstream player which involving in oil and gas production through the production sharing contract awarded by Petronas. All oil and gas will be sold to Petronas. Fluctuation of oil price will affect the capex of National Oil Companies which will affect the contacts awarded to SKP.

Revenue forecast for FYE 2017:
1Q2017 (Actual) RM1.9B (Engineering, Drilling and Energy)
Contract to be recognised RM4.9B (Engineering and drilling)
Energy (Q2 to Q4) RM0.9B (Q1 RM0.3b x 3)
Contract announced on 11/7/16 RM0.35B (RM461m x6/8-pro-rated)
Contract announced on 28/7/16 RM0.13B (RM510m x6/24- pro-rated)

Total RM8.18B

Hopefully more contracts was awarded in third quarter of FYE 2017 (Aug to Oct 2016) so that more revenue can be recognised in FYE 2017 to achieve around RM10B revenue as per previous two year. Even possibility is low.

Seadrill is involving in drilling business which is similar business with SKP. Therefore, we can refer to this counter to understand how bad the market environment of drilling business. That is why I so concern to the utilisation rate of SKP drilling assets. In the worse case, 8 of 16 tender rigs (50%) will be idle at the end of 31 Jan 2017 due to contract expired. Currently, there is 4 drilling rig have been stacked (cold stacked) which mean these assets can't looking for new job immediately because only little staff will be maintained for maintenance work.The rest of staff will sacked.

SKP has a joint venture (50-50) with Seadrill for Petrobras' contract which providing 6 PLSV. Do you really study this counter??? You are just keep saying positively to this counter without study it? LOL

Actually no need to recommend what action should be taken as we take our own risk. Just share the info will do. And i do not think our trading will affect this counter unless there is big shark here. LOL

I'm still holding this counter. Does it mean I must say positively to this counter? Or you prefer someone to boost your confidence? I'm just comment it objectively, what's wrong with that?

Oil price downtrend= yes
Storage facilities hit new record= yes
New contract replenishment slower= yes
Drilling assets' chartered rate reduced= yes
Drilling assets' high change to be stacked (50%)= yes

All these are facts. Do you try to ignore these?

SKP LELONG if anyone interested!

But there is two guys always predict SKP will up everyday. LOL

SKP need to get RM8b to RM10b to maintain future revenue at RM10b per year. As at today, only RM3b was awarded to SKP. Still far away to achieve the target.

Can i reliable on this reply from SKP??? Definitely will affect the SKP future revenue as the fixed fee from the contract will gone. And SKP only can get back the capital expenditure which spent in previous years with no compensation of fixed income at all.That is why most of the Broker revise the earning forecast for FY2017, FY2018 and so on.

It is not a gain. Just a reimbursement of previous capital expenditure in advance. It will only improve the cash position of SKP and deteriorate the future earning due to termination of contract.

Petronas cuts expenditure due to return of Berantai is not attractive.
http://www.petronas.com.my/media-relations/media-releases/Pages/article/Cessation-of-Berantai-Risk-Service-Contract.aspx

Overall the oil price is dropping from US$50 to US$45-US$46. Negative factors:
1) Production of canada(Wild fire) and negeria(Public Unrest) is resumed.
2) Full storage capacity of China oil reserve, stop importing for Strategic reserve
3) Nearly full storage capacity of oil in worldwide (Storage fleets all parking nearby US and Singapore)
4) Brexit may cause uncertainty in economic which may lead to reduction of oil demand.
5) Production volume of IRAN is not reach the max yet.
6) Off peak season for oil refinery is coming.

Even the oil price stable at $50, but capex of Upstream players still not willing to invest due to the uncertainty in future oil price. This will hit to the contract replenishment of SKP. Currently, SKP contract replenishment rate is much slower than contract utilsation, and the order book was reduced from $30b(the higher) to $20b as at 1Q17.

For Rig business, currently 4 rigs are under stacked condition. In worse case, there will be 10 rigs will be idle at the end of FYE 31 Jan 2017. Also there is reduction in daily chartered rate of rigs.

For Energy business, for 2nd quarter, the profit will be increase due to the increase of average lifting price from $38/b to above $40 in 2nd quarter.

This counter is for long term investment (at least 3 years).