STX OSV

STX OSV: Announced strong 3Q11 results, which was at the top end of estimates. Rev at Nok 3.4b, +57.1% yoy and +22.2% qoq, while Net Profit at Nok 374m, +145.7% yoy and +37.5% qoq. Ebitda Margins continued to improve at 17.5% vs 16.4% qoq.

Strong rev performance was due to continued orders recognition from grp’s strong orderbook, while margin increases were attributed to continued stable operations, successful project execution, improved productivity, and favourable business environment, as well as on-time deliveries of highly complex projects.

During the qtr, grp secured new contracts for 3 fishing trawlers worth Nok 809m, while since the end of 3Q11, six more contracts have been secured, two of which are firm contracts and 4 still subject to financing approvals. Grp’s new order intake for 9M11(Minus the 6 contracts) totalled 14 vessels worth Nok 5,090m, short of expectations, mainly attributed to macroeconomic uncertainties. Grp note that Contracts for the construction of 8 LPG carriers for Transpetro (Worth approx Nok 2.8b), will be made effective around 17th November 2011.

Going forward, grp continues to receive a healthy stream of inquiries and has projects under discussion within all vessel segments. However, macro uncertainties, including concerns about shipowners’ access to financing will cloud visibility on new order intake for the time being. Co. expects rev for FY11 to be higher then FY10. We note that at current price valuations are undemanding, with grp trading at an annualized 5x FY11E P/E.