Triyards

Triyards: big drop in 3QFYAug13 results, though in line with the street’s forecast. Revenue fell 61% to US$65.7m, mainly due to lower revenue recognized for the construction of subsea construction vessel, Lewek Constellation, which peaked during 2H12. The decrease was partially offset by the revenue recognized for 3 SEU projects which started construction during 1HFY13, progress of which accelerated during 3Q13. Accordingly, net profit fell 55% to US$7.5m, as margins held firm. The group is cautiously optimistic that the outlook on the oil and gas industries will be positive in the next 12 mths. Demand for medium to large sized offshore support vessels and self elevating units are expected to continue to be good in SE Asia, backed by healthy level of enquiries. Expects other upcoming SEU projects in the pipeline as well as ship repair work to keep yard utilization high through FY14-15. Net orderbook stands at US$264m. At $0.74 last close, the stock trades at 5.4x annualized 9MFY13 P/E, 1.3x P/B. UOBK keeps at Buy with TP $1.11. OCBC maintains Buy with TP $1.07, awaits possible news of a yard acquisition.