Jaya Holdings

Jaya Holdings: 1QFY14 net profit fell 24% y/y to US$7.6m, keeping pace with the 24% decline in revenue to US$29.6m. Excluding vessel sales from the previous year, recurring revenue would have risen 12% on a like-for-like basis, driven by improved charter utilization of 91% from 84% in 1QFY13. Similarly, core net profit would have been 15% higher y/y, helped by a 10ppt improvement in gross margin to 41%. Management cites that across SEA, Middle East and West Africa, jack up and floater demand is stronger this year, underpinning demand for OSVs. There is a trend towards a redevelopment of fields in SEA and Mexico, and this trend will likely continue. Furthermore, continual deepwater discoveries in West and East Africa will support demand for OSVs in those markets for the years to come. While offshore activity is likely to decrease in the monsoon season, charter utilization rate is expected to remain healthy in the following quarter. Chartering orderbook rose 30% to US$255m y/y Jaya ended Sep with an NAV of US$0.7104, which translates to a valuation of 0.77x P/B, at the last traded price of $0.68