Falcon

Falcon: 2QFY14 revenue jumped 11-fold y/y to US$183.5m, and net profit surged to US$38.9m from US$1.9m a year ago, mainly due to the US$127.8m disposal of two jack-up rigs during the quarter. Excluding this contribution, revenue would still have increased 213% to US$55.7m, driven by more vessels being deployed by its Marine Division, as well as one-off contracts secured and increase in the provision of sundry services rendered by the Oilfield Services Division. Core net profit would also have grown by 3-fold to an estimated US$6.4m. As such Falcon declared an interim dividend of 0.5¢ (nil in 1HFY13). With buoyant demand and stable oil prices conducive to rising levels of exploration and production activities, the group is optimistic on the business prospects for its Marine, Drilling, Oilfield Projects and Oilfield Services divisions. Barring unforeseen circumstances, the group expects to be profitable in the current FY. At the last close of $0.41, Falcon trades at 1.2x P/B, 10.4x annualized 2QFY14 P/E.