Ezion: CS thinks that though market perceives Ezion’s earnings to be ‘locked in’ from long-term contracts backed by NOCs, this could be reversed as Pemex and Petronas renegotiate dayrates for existing rig contracts.
A 20% day rate reduction could estimatedly reduce ROE for each unit from 43% to 25%, while a 40% dayrate reduction could lead to FCF just being able to meet asset-debt repayment.
CS maintains Underperform as CS expects a deteriorating environment to impact earnings. CS reduced TP to $1.00 from $1.50
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