Ezra

Ezra: 1QFYAug14 revenue +22% y/y to US$339.8m, net profit -6% to US$6.3m, due to a dip in gross margins, absence of a disposal gain of US$3.8m from a year ago, and higher minority interest. EMAS AMC, the subsea services division, remained the main revenue contributor as a result of an increase in project activities and bolstered by the addition of strategic pipelay installation assets during 4QFY13. The unit has sustained its second consecutive quarter of operational profit. EMAS Marine, the offshore support services division, reported flat revenue y/y. operating margins were impacted by vessel maintenance and costs relating to operational transit although this is expected to improve over the longer term. Order book remains strong at above US$2b with the offshore support services division utilization of ~90%. The group has been reviewing strategic initiatives for EMAS AMC that will optimize its competitive position, improve its profile and access to capital. The group will appoint appropriate advisers in due course. At $1.375, the stock trades at 41.7x annualized 1QFY14 P/E, 0.92x P/B.