Ezra

Ezra: In NDR hosted by HSBC, Ezra’s margins, E&P capex, OSV pricing and outlook were key discussion points. Ezra’s subsea backlog has doubled in the past couple of years, and is expected to double again in the next 2 years to over US$2.5b by end FY15. For the company, West Africa and deepwater Gulf of Mexico are the best medium-term growth regions. Subsea revenues are expected to cross the US$1b mark from growing orderbook and contributions from 2 new vessels deployed in late-2013. Margins should also improve materially as legacy low margin projects are finished and economies of scale are kicking in. HSBC is bullish on the industry outlook. Subsea umbilicals, risers and flowlines is expected to grow 60% within 2013-16 with a cumulative spend of US$120b over the 4 years, and Ezra is among half a dozen globally equipped to compete in this space. HSBC maintains a O/W on Ezra with TP $1.33