Swiber

Swiber: 1QFY14 results highlight by CIMB cited the dwindling order book and high operating leverage, which swung Swiber into a core loss of US$46m vs. profit expectation of US$7m, the weakest quarter since the global financial crisis. If not for the US$95m gain from the sale of Kreuz, 1Q14 results would have been uglier. Earnings visibility is deteriorating as we struggle to forecast what is ahead for 2016. The order book weakened by 19% since end-13 to US$650m despite the US$235m contracts won in Feb 14. Net gearing is still high at 1.03x. CIMB slash EPS by 95-144% for FY14-15 and forecast a loss of US$20m for FY16 given poor margins and revenue. CIMB maintains Reduce rating with TP of $0.58.