Pacific Radiance

Pacific Radiance: 4Q13 net profit was up 7 fold at US$16.7m while revenue climbed 43%, mainly attributable contribution growth in the Offshore Support Services Business (+29% to US$26.5m) and Subsea Business (+69% to US$7.2m), on improved utilization and charter rates. Gross margins crept up 3ppt to 33.7%. The spike in bottomline was buoyed by a 33% increase in share of JV’s profits to US$3.5m, while share of associates saw a reverse US$6.2m loss to a US$1m gain. Management expects charter and utilization rates to stay strong, in line with rising E&P production spending in Asia, Africa, Australia and South and Central America, fueling demand for offshore support services in these regions. Final DPS of 2¢ proposed, bringing full year dividend to ~20¢ (US14.19¢ interim DPS announced previously), implying yield of ~20%. The stock currently trades at 9.6x trailing P/E.