STX OSV

STX OSV: Announced that it has secured a new contract for the design and construction of one Platform Supply Vessel (PSV) for Troms Offshore. The PSV will be built at grp’s yard in Romania, and towed to Norway for outfitting, commissioning and delivery. YTD, latest order would bring grp’s YTD order book to approx NOK5.3b, less than half of what was initially expected by analysts, although we note that grp has not made effective its orders for 8 LPG carriers (Nok 3b), which many analysts are tipping for to be recognized by 4Q11, while current orderbook of Approx. of Nok16.8b underpins earnings virility till 2014.

Meanwhile, CLSA maintained its Buy Call on grp with $1.80 TP, while DMG has Buy Call and $1.56 TP. House had a chat with mgt, who remains positive on outlook, indicating that their order pipeline has not collapsed and demand for vessels with 2013/14 deliveries is still strong. Do not expect a delay in ordering beyond the end of 2011 unless credit markets dry up as they did in 2008 or Brent prices collapse below US$60-70, and Co believes it can maintain its rev at Nok11-12b in the coming yrs, which it has been posting for the past 3 years and maintains guidance of strong 2H11 earnings with EBITDA margins of at least 15%.