“However, the strong oil prices seen in FY2022 were unable to offset the 189% y-o-y increase in production and operating expenses,” they point out. “As a result, the company recorded a loss at the patmi level and was materially below our expectations.” The Yumna Field also recorded a y-o-y decline in oil liftings due to production stoppages during the year.
UOB Kay Hian analysts Llelleythan Tan and Adrian Loh have downgraded their call on Rex International (SGX:5WH
) to “sell” with a reduced target price of 10 cents, from 45 cents previously.
In their March 21 report, Tan and Loh note that the company isn’t the “oil price play that we expected”. Despite average oil prices jumping by 42% y-o-y, the company barely broke even in the FY2022 due to its poor oil production performance. During the year, Rex’s revenue grew by 7.5% y-o-y to US$170 million ($226.8 million) due to the inclusion of oil liftings from the Brage Field in Norway. A 31% y-o-y increase in average oil prices in Oman’s Yumna Field also contributed to the higher yearly revenue, the analysts say.
