Technics Oil & Gas

Technics Oil & Gas: Bad set of results as group's 2Q13 earnings declined 98% to $143k, dragged by a 84% decline of revenues to $8.2m to which management referenced its reduction in shareholding in Norr Offshore Group Ltd (NOG) which was done in Aug 2012, as well as the challenging conditions of the global economy. The spin-off of NOG reduced the group's stakeholding from 52.5% to 40.2% makes NOG an associate for equity accounting. However, the reported share of profit from equity-accounted associates reported for the period of $672k, even if it is reported as a subsidiary, would have resulted that the group took a big hit in its recognition of revenues. Management highlighted that its project schedules are subject to changes due to external factors like variances to original project specifications, etc. Eversendai's recent 20.1% entry into Technics in Jan 2013 have not shown any concrete results, given the publicly announced "encouraging enquiries" on projects in the onshore and offshore space on 6 Apr. Technics Oil & Gas trades at 10.6x P/E on its last close, 3.2x P/B.