Hibiscus: Strong Earning but Minor Hiccup Ahead

Last Thursday, Hibiscus dropped 14 sen to RM0.96 after it announced a good set of result for QE30/6/2018. Its net profit rose 19% q-o-q or 10-fold to RM99 million while revenue rose 145% q-o-q or 148% y-o-y to RM185 million.


Table 1: Hibiscus's last 8 quarterly result

Hibiscus's strong performance was due to good selling prices of its output which boost its PAT for its North Sabah and Anasuria segments.

Table 2: Hibiscus's segmental result for QE30/6/2018, QE30/6/2017 & QE31/3/2018

We can see Hibiscus's strong financial performance for the past 4-5 years in the graph below.


Graph: Hibiscus's last 19 quarterly result

In the notes accompanying its financial statements, Hibiscus mentioned that it will be ramp-up planned maintenance activities for the North Sabah segment in the next 2 quarters (see Note 19). This will reduce its uptime and output for the 2 quarters; thus affecting its PAT. For an idea of the impact of this planned maintenance activities, you can refer to the earlier planned shutdown of the Anasuria FPSO in mid-September 2017 to mid-October 2017 which reduce its uptime to 70 days and 57 days for the quarter of Jul-Sep 2017 and Oct-Dec 2017 respectively.


Table 3: Anasuria's last 4 quarterly production operation

If the planned maintenance for North Sabah were to be carried out in September and October, then the impact will be "shared out" between the next 2 quarters; thus avoiding a lump sum impact on the bottom-line. For an idea of the North Sabah segment, see the table below.

Table 4: North Sabah's last 4 quarterly production operation

The sharp drop in share price last Thursday brought the share price near its intermediate uptrend line, SS at RM0.93. This could be a good level to get into a stock that will benefit from rising crude oil prices.


Chart: Hibiscus's daily chart as at Sep 3, 2018 (Source: Malaysiastock.biz)

Good luck!