05/10/2022 10:52 AM

KUALA LUMPUR, Oct 5 (Bernama) -- Hibiscus Petroleum Bhd's shares were up in the early trade after the company resolved its tax issue in Sabah by paying the sales and service tax (SST) amounting to RM85.7 million to the Sabah state government.

At 10.11 am, the counter gained 9.5 sen to 96.5 sen, with 32.35 million units traded.

In a note today, PublicInvest Research said Hibiscus Petroleum’s management clarified that the decision was made to create a stable environment for continuing investment and smooth operations in Sabah.

“We view this development positively as it removes the lingering uncertainty in its Sabah operations that could affect its operational efficiency,” it said.

Moving forward, the group is expected to pay five per cent Sabah SST per annum, it said.

“Our projection suggests that it is expected to pay an estimated amount of RM44.8 million per year, by assuming crude oil sales of around 2.1 thousand standard barrels (mbbls) from North Sabah and 700 mbbls from Kinabalu field," it said. 

PublicInvest Research has also upgraded its rating on Hibiscus Petroleum to “buy” with a higher target price of RM1.18 from RM1.05 previously, due to the latter’s attractive upside potential amid its lucrative earnings from the consolidation of Repsol assets’ earnings.


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