Swissco

Swissco: In Swissco’s 4Q14 results briefing, management reiterated its confidence that the charter contracts for its nine rigs are firm.

Out of its fleet of nine rigs, two are for accommodation purpose and will commence operations by 1Q15 and 2Q15, respectively, providing the growth in FY15. The remaining seven are drilling rigs contracted to Pemex. Four rigs (bareboat charter rates: US$40k/day) are up for renewal in 2015-16. With the renewal, Swissco will take on the role of time charterer from Ensco, with the help of a local operator, of which, any difference in rates would likely be attributed to the operator and hence has neutral impact to earnings. Meanwhile, the The other three rigs operated by GSP (at bareboat charter at c.US$60k/day) are unlikely to see any reduction in rates as there is presently no pressure from Pemex.

CIMB maintains Buy with TP reduced to $0.90 from $1.20.