Ezra

Ezra: 1Q13 results was largely in-line although at the lower end of estimates, with rev at US$278.7m, +54% yoy and -12% qoq, while net profit at US$6.8m, -49% yoy and -6% qoq. Gross margins remained flat at 18% vs 19% yoy. Higher rev was mainly due to the strong step-up in subsea activity, with EMAS AMC contributing largely to the increase in the Group’s sales for the quarter, while its offshore support services division added another US$9.0m as charter income rose due mainly to the inclusion of three mths of operations for 1 AHTS and 2 PSV. Lower net profit was however attributed largely to higher personnel costs incurred to build up the subsea services division’s manpower base in preparation of new projects and vessels, lower contributions from associated co’s and higher financial expenses in respect of the Grp’s expansion program. Going forward, however grp expect stronger operating leverage and efficiencies in 2H13 as subsea activities ramp up. Separately, grp also announced multiple new contract wins totalling more than US$160m. The contracts involved the Group’s various business divisions, and are located across the North Sea and Asia Pacific regions. Overall fundamentals remain fairly reasonable, although Net Gearing is a Tad high at 0.95x, which is offset by an interest coverageage of 3.7x. At current price, grp trades at an approx. 14x Trailing P/E.