KUCHING: Alam Maritim Resources Bhd (Alam Maritim) announced that its numbers for financial year 2011 (FY10) were worse than previously predicted with the finalisation of its annual audited accounts.

In a research report released yesterday, ECM Libra Capital Sdn Bhd’s research arm (ECM Libra Research) continued to be positive on the group announced its new charters in the oil and gas industry.

Alam Maritim had recently announced that there was a variance of more than 10 per cent in the total comprehensive losses reported in the unaudited financial statements announced on February 28 and the audited financial statements for the financial year ended December 31, 2010 announced on April 29.

The adjustments amounted to an additional loss of RM5.8 million bringing FY10’s loss to RM14.06 million. The adjustments made were for interest charge not taken up by foreign-based subsidiaries, share of results of 49 per cent Alam-PE Holdings Sdn Bhd overstated, and share of results of jointly controlled entity (foreign-based) being overstated.

The news was a slight negative for Alam as FY10 continued to haunt it. However, ECM Libra Research believed that it would be the last of the group’s losses as it moved into FY11.

The analyst noted that there were no more losses attributable to debts owing by Vastalux Energy Bhd, as that had been fully written off. This was supported by an earlier research report by fellow analyst in OSK Research Sdn Bhd dated April 14.

ECM Libra Research continued to look forward and with several new charters already bagged this year, Alam Maritim was certainly on the swift path to recovery.

To recap, Alam Maritim announced some seven new charters year to date which included long term and spot charters. The analyst expected more long term charters to come through as spot charters expired and also a major contract for its pipe lay barge, the 1MAS-300.

With the share price rising fast, the analyst indicated that it would be constantly evaluating its valuations and also potential for earnings upgrade as contracts continued to roll out.

The three main catalysts continued to be the increased utilisation from 70 per cent to 79 per cent by year end on announcements, the rise in charter rates as spare capacity thinned out in the industry, and charter of the 1MAS-300 as mentioned earlier.

Based on a price earnings ratio of 14.2 times and pegging it to FY11 fully diluted earnings per share of 9.2 sen, the analyst derived a target price of RM1.31 per share.