Ramunia warrants spark interest
The Star
16 July 2005

As a result of large oil discoveries off the coast of East Malaysia, several companies, which are either involved directly or indirectly in the exploration process, have generated interests and been tipped to flourish from new contracts for work at the new sites.

One such company is Ramunia Holdings Bhd. Over the past couple of weeks, an average of 13.4 million Ramunia shares have changed hands daily, making it among the most actively traded counters on the Bursa Malaysia.

The second board counter has gained as much as 81% or 48.5 sen over the past two weeks, on the back of speculation of more jobs from the likes of state-controlled oil major, Petroliam Nasional Bhd (Petronas), Talisman Energy Inc and Murphy Oil Corp.

With the price of oil on the rise, deep-water reserves, which were previously viewed as unattractive due to the high costs involved in drilling, are now being explored.

Many of the local oil and gas counters, Ramunia included, are hoping for a slice of this new pie.

Company officials say that Ramunia has bid for as much as RM1bil worth of jobs and is aggressively looking at increasing its presence abroad, especiallyin Vietnam and Indonesia.

Ramunia recently inked an RM11.4mil (US$3mil) contract with South Korean giant Hyundai Heavy Industries Co Ltd to supply pipeline support for one of the company’s project in Thailand.

Ramunia officials also say that there are two contracts with multi-nationals based in Indonesia currently being negotiated, but declined to furnish any details.

In late April, Ramunia managing director Arshad Ahmad, at the company’s annual general meeting, had indicated that Ramunia was looking to double its existing order book of some RM260mil by year-end.

This should augur well for the company’s earnings in the near future.

For the first half of its financial year ending October 2005, Ramunia posted a net loss of RM34.5mil on the back of RM48.7mil in sales.

For the six-month period Ramunia posted a loss per share of 19 sen.

The loss was attributable to a restructuring exercise which was conducted when Ramunia took over the listing status of financially troubled Saship Holdings Bhd.

The impact of the restructuring will be felt this financial year. In its prospectus, Ramunia forecasts an after-tax and minority interest loss of RM25.9mil from RM193.6mil in sales for the financial year ending October 2005.

Despite the bleak outlook for the current year, Ramunia prospects may be spurred on by escalating oil prices.

Ramunia shares ended trading at RM1.08 on Thursday.

Much like the mother share, Ramunia’s warrants have also generated much interest of late. Over the past week, the warrants have gained some 32% or 19 sen to close at 78.5 sen on Thursday.

The company’s warrants, which expire on Feb 20, 2014, are trading at a gearing of 1.4 times and at a premium of some 24.3%. Ramunia’s warrants have a strike price of 55 sen.

The warrants hit its 52-week high of 97.5 sen on March 17 this year while its low of 2.5 sen was on Jan 28 this year as well.