Tuesday, August 14, 2012

COSCO

COSCO: Secured a US$170m contract from Talland Navigation Ltd for the construction of one Jackup of the LeTourneau Super 116E Class design with delivery scheduled for 1Q2015. The rig will have drilling depth of up to 30k ft and will be capable of operating in waters of 350ft with accommodation for up to 120 persons on board. Earlier in Apr this yr, Keppel Corp secured a similar contract from Mexico’s Perforadora for approx US$205m which comparatively puts COSCO’s win as a low bid. #CSE Global: 2Q12 was broadly in line with consensus expectations supported by its Middle East business that returned to profitability. MENA achieved the highest net margin of 9.8%. This is despite the recognition of $7.5m zero-margin revenue from an on-going cost-overrun project, which should be completed by 3Q. As a result, grp’s 1H12 gross margins trended down to 28% vs. its typical 37%. Further, CSE continued to benefit from the development of on-shore gas projects in the US. Rev from the US jumped 65% yoy - highest among the three regions. Grp’s sales grew 42% yoy. CSE also booked a $10m disposal gain from the sale of its associate Ebworx. Lastly, it declared an interim DPS of 1.5Scts or 37% of 1H EPS – in line with group’s 40% dividend policy. Order book stands atS$370m vs $396m at end-2Q11. Similar to an uptick of orders in 2H11, CIMB expect a surge in order momentum with significant contracts from a telecoms job in West Africa, deepwater contracts from the US, and furnace jobs from China. Rating as follow: CIMB maintains O/p with $1.02 TP

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