EZRA: CLSA maintains O/p, but reduces TP to $1.15 frpm $1.20. House note that EOC’s termination of Lewek Arunothai’s contract with PTTEP is leading house to reduce FY12 earnings forecasts for Ezra by 10%. It is adding new uncertainty as the FPSO has not yet been awarded the new contract it bid for.
Note however that Ezra’s offshore support services business is however set to improve as charter rates pick up in 2H12. Additionally, expect AMC to start making positive contributions as the company recognizes US$400m in subsea contracts. Ezra’s gearing is set to reach 140% by the end of FY12 but we expect the company to divest some of its assets to raise cash.
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