Mermaid

Mermaid: Subsea continued to propel Mermaid forward as it swung into the black in 1Q13 vs. a loss in the previous year. The grp posted core earnings of THB20.7m, vs a loss of THB 85.4m yoy. The improved subsea performance was driven by higher day rates from the provision of value-added services and longer contract durations, whereby 80% of grp’s subsea rev numbers for FY13 and 40% for FY14 were secured by recent contract announcements. As expected, drilling posted a net loss of THB5.2m (1Q12: THB4.2m) due to downtime for MTR-2. MTR-2 is undergoing a 4-mth survey till Mar 2013 and is in contract renewal discussions with an existing client. Meanwhile, MTR-1 has extended its accommodation contract to Jul13 (US$30,000 day rate). Mermaid is looking to invest in newer tender rigs, which is positiv, given the favourable demand-supply for this asset-class. Mermaid’s 33.75%-owned AOD has received its 1st jack-up, which is being mobilised to the Persian Gulf. There, it will commence its 3-year contract from Apr 2013 on lucrative day rates of US$180,000. Expect Mermaid to retain its investment in AOD. There could be considerable with another two more jack-ups joining in 2013. Ratings as follow: CIMB maintains O/p with $0.51 TP