Q2 2026 Hibiscus Petroleum Bhd Earnings Call Transcript
Key Points
- Hibiscus Petroleum Bhd (XKLS:5199) reported a solid quarter with a 10% increase in production and a 16% reduction in net operating expenses.
- The company declared a second interim dividend of $0.02 per share, maintaining a dividend guidance of $0.08 per share, with potential upside to $0.10 if oil prices exceed $75 per barrel.
- Significant progress was made on the Teal West project, with first oil expected in mid-2026, contributing to the company's production target of 35,000 barrels of oil equivalent per day.
- The company has doubled its cash balances to MYR760 million as of December 31, 2025, despite significant capital expenditures.
- Hibiscus Petroleum Bhd (XKLS:5199) is actively pursuing energy transition initiatives, including the construction of a solar PV farm in Brunei, expected to generate electricity by January 2027.
- The company experienced a topsy-turvy first half of the year due to maintenance activities and full field shutdowns, impacting production and uptime.
- There is uncertainty regarding the timeline for finalizing strategic investor partnerships, which could be distracting if not resolved by the end of the financial year.
- The company is in a heavy investment CapEx period, which may delay the realization of free cash flow from new assets.
- The effective tax rate is high, particularly in the UK, due to additional allowances, resulting in a group-wide effective tax rate of approximately 42% to 45%.
- There is a wide gap between the fundamental value of the company and its market price, which is recognized by both the company and potential strategic investors.
I'm Lily Ling, VP of Corporate Development. Joining me today are Dr. Kenneth Pereira, our Managing Director; CY Yip, Chief Financial Officer; Joyce Vasudevan, our SVP of Corporate Finance; Deepak Thakur, our SVP Economics and Business Planning; and from my team, Andrew, Zehan, and Adam.
Earlier today we released our results with a corporate and business update, press release, and a dividend declaration. All the announcements are on the website and in these things, check. It's been a solid quarter for the group as we (technical difficulty) head into the second half of the financial year. With that, over to Deepak to take us through the presentation.
Thank you, Lily. And many thanks to all of you for funding this session on Friday. In the next three slides, we are going to talk about the key developments that are building momentum heading into the second half of 2026 and beyond.
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