Ezra

Ezra - No meaningful news to highlight today regarding Ezra, although note that in Dec, Ezra’s share price hit a new two year high at $1.475. The company responded to SGX’s query regarding its substantial increase in share price yesterday, saying that the group is currently evaluating and in discussions with regards to certain business proposals. Management however cautions that there is no certainty that these discussions will progress beyond the current stage, or that any transaction will arise from these discussions. To recap, in its recent 4QFYAug13 results, Ezra’s revenue grew 28% y/y to US$419.2m, driven by improvements across all three business segments, though led by the subsea services division (EMAS AMC) which saw an increase in the number and value of projects undertaken. Net profit increased 20% to US$10.0m, only because a turnaround in associated companies (US$5.1m contribution versus a US$1.1m loss in 4QFY12) helped offset lower gross margins and higher admin expenses. Going forward, management is fairly optimistic about the prospects for FY14, and believes the long-term fundamentals of the oil & gas industry is intact, with deep water development and production still expected to drive longer term capital spending trends. Ezra currently trades at 19.7x forward P/E and 1.18x P/B. Notwithstanding the share price momentum, the street remains wary on the stock, with nil Buy, 4 Hold and 7 Sell ratings.