Really have to respect these shale producers. I thought they have all closed down. When the price has gone up high enough, they still have the financial muscle to add more rigs. Does Umwog have the financial muscle to buy more rigs when it is cheap now? They can't compete in a long term by relying on these rigs that are all bought at prices higher than a brand new one today.
As the west refused to recognise China as market economy recently, the next logical pinch on China should be rise of crude oil price next year. Just my wild guess and I bought Umwog for keep.
Actually why many here keep telling negative news here. It's a waste of time. If u don't have, just go away. Don't make as though u r an expert on this company. Does writing here helps to make u money? Does it help u in any way? By writing rubbish, does it make u happy?
Some people write as though they can make decisions for Umwog. It's really foolish. Don't invest if u don't like the company, go to the forums where u have vested interest, not where u don't.
Obviously, their rigs will get old and for every dollar earned on charter rate, more will have to be spent on maintenance. Older rigs will get lower charter rate too. And how can you spend more on maintenance when at the same, these rigs are also getting high depreciation cost because they are purchased at high price. This will not apply if their rigs are well impaired but I don't think so. I have posted a link previously which provides indicative market value for each rig. Why not you check out those values and compared against their book value.
As an investor, you should know that if you entered an investment at high price, you should continue to enter at the low price to average down the cost. But if you have depleted all your financial power during good times and unable to buy more when price is low, you will have to wait a long time to breakeven. The same apply in this rig business.
I have explained my reason. It's your turn to explain why my comment is rubbish.
Imagine a POKER table with PNB, EPF & KWSP holding the other hands. No foreigner investor interested to invest and refinancing of loan with retailer's hard earned money. No expansion plan of buying new rigs with money derived from RI for future plan. This is gambling away your money not investment. Think wisely please.
most of his rigs are fairly new.....so u understand that impairment is one off cost & will not affect competition. Maintenance is part of doing business that why they have to source higher charter rates or plan for future diversification. They have a monopoly locally
I'm not promoting this share as i have no vested interest.......The Company's results are showing a turnaround & crude oil prices seems to be stable & uptrend.
Can u project the the next quarterly results minus any impairment given the current available public info?
PNB investment here is fairly huge & do take that into consideration.
Good question. The Market Sentiments is negative and possibility of KLCI will test 1700 by end of this week. But a Company with huge investment from PNB only to shout about for it's financial result turn around, is on a uptrend. Does that make any sense? Go in when price < 0.3 cents is a wise investment decision.
We are upgrading UMWOG to a BUY with an unchanged DCF-derived TP of RM0.35. This is the first quarter that the group has reported a profit since 4Q15. However, it is unclear at this juncture if the current quarter performance can be sustained as EBITDA margin came in at 55%, which is higher than the margins during the good old days of 40%. We make no changes to our earnings pending Monday afternoon’s analyst briefing.
First Positive Sign Since 4Q15 UMWOG’s 3Q17 earnings saw a turnaround after significant losses over the past two years. Headline net profit came in at RM3.4m (+107% qoq, +103% yoy), a sharp improvement over the previous quarter’s losses. Nevertheless, 9M17 earnings remained in the red at RM147m, which accounted for 81% of our and 68% of consensus forecasts. 9M17 revenue surged 48% yoy to RM394.7m driven by a higher rig utilisation rate of 61% vs. 22% in 9M16.
Stronger QoQ 3Q17 recorded a headline profit of RM3.4m. After stripping off the one-offs, core net profit stood at RM5.8m (+112% qoq, +104% yoy) driven by the revenue growth of 48% qoq as average utilisation rate recovered to 90% vs. 68% in 2Q17. This also led to the jump in EBITDA margin from 31% to 55%. We believe that the RM7.6m ‘other operating income’ in this quarter is non-reccurent and may have provided the exceptional boost in margin and earnings.
Upgrade to BUY We upgrade the stock to a BUY with an unchanged DCF-derived TP of RM0.35. Key downside risks to our BUY call would be lower-than-expected utilisation rate and daily charter rate.
My comment: Grammatical and spelling mistakes let alone forecast. Must be written by local grad. Anyway follow recommendation and will make it BIG since SUGAR daddy (PNB), will buy RI again.
Umwog current rig utilisation contracts are up for short term for another year only but they will aggresively tender more contracts as daily charter rates are going up after OPEC production cut. My piece of advice is dont get affected by other temporary negative comments here and hold on. I believe after next year quarter report, at least TP of 0.45 or above. If you sell now or at 0.35 and there is people who is willing to collect, you should think again why they want to collect at 0.35 ^^
N2 and N3 will approach 10 years old soon. It will not command the same charter rate compared to a new rig. Maintenance will be costly, just like an old car. They can monopolise the market now because of Petronas. If oil price ever reach USD80, I doubt Petronas will continue to give preference to them.
They should not buy new rigs only when oil price reaches USD80, just like why we should not buy this counter only when oil price reaches USD80. They, like many of us here, should buy when price is low unless ... the management thinks oil price unlikely to reach USD80 soon and hence, no hurry to buy new rig. I am sure PNB can give them the needed fund for this, if it make sense.
Q4 should better than Q3 with interest savings, but that higher profit will be shared by many shareholders. Let's dissect the Q3 result. If we exclude the investment income, it is still a loss, probably dragged down by oilfield services segment. Not sure when are they going to sell off this business.
I wouldn't consider the share price on uptrend, depending on your investment timeframe. To me, it's more like hovering sideways.
We can't compare ourselves to PNB. Their exposure in this company is probably a fraction of their total investable fund. If you are only committing a fraction, no harm trying your luck. Besides, PNB has different investment timeframe, they had UMW at about 30sen way back in the 80s and can hold very long. Is that your plan?
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
allan83
119 posts
Posted by allan83 > 2017-11-30 20:11 | Report Abuse
Buy 200k keep it next year sell 800k