STX OSV

STX OSV: Key highlight in 2Q12 result includes a special interim dividend of 13c/ share translating to an interim div yield of 8.4%. 2Q12 results was in-line, with rev at Nok3.3b, +22% yoy and +18.7% qoq, while net profit Nok279m, +2.6% yoy and +3% qoq. Ebitda margins came in at 13.8% (in-line with grp’s guidance) vs an extraordinarily strong 2Q11 at 16.4%. Grp note that it is experiencing delays in several projects at the existing Brazil yard in Niterói mostly due to general yard overload, temporary supplier constraints, and bottlenecks in access to subcontracting capacity. The Group maintains prudent risk mgt procedures to mitigate the effects of these delays. The financial impact has been accounted for on an ongoing basis, weighing slightly down on Group average margins. Meanwhile, work on the new yard in Brazil, STX OSV Promar is progressing well and shipyard construction is currently approximately 40% complete. Shipbuilding activities are scheduled to begin in 2Q13, in line with previous estimates. Going forward, grp remains positive on prospects, noting that while ongoing macroeconomic uncertainties are still present, it remains confident in ability to take advantage of the robust long-term demand for larger, more complex and customized vessels. We note that fundamental remains strong with grp’s orderbook at Nok18.3b, underpinning earnings visibility till 2015, while Ytd Orderwin stands at Nok7.3b vs FY11 of Nok11.1b. Grp stands at a Net Cash position of Nok 2.9b.