Vard

Vard: DMG hosted Vard for a two-day non-deal roadshow in Singapore, which was well attended with >30 analysts and fund managers. Focus as expected, was on the negative surprises in Brazil. DMG estimates Vard took a ~NOK200m provision for the delays and cost overruns in Brazil and NOK70m in goodwill write-down for Niterói. Making adjustments for the provisions, operations outside Brazil is stable, with an estimated EBITDA margin of 10%-11%. DMG notes Vard’s share price has been severely hit following weak 2Q13 results. But notes FY13F valuations at 9.4x P/E and 3.7x EV/EBITDA (ex. construction loans) are attractive. Sees catalysts for rebound on new order wins and recovery of investor confidence once the worst is proven to be over. Maintains Buy with TP $1.10.