Swiber

Swiber: UOB Kay Hian note that results were in-line with expectations. Note that grp is benefitting from a large orderbook. Turnover is +29% yoy because of a larger orderbook resulting from strong contract wins in 2011 and ytd. Orderbook currently stands at about US$1.2b vs approximately US$800m yoy. Tip better earnings quality this time round, as the bulk of 1Q12 earnings came from Swiber's core business while 1Q11's earnings were substantially boosted by a non-core other operating income of US$11.0m (including fair value gain US$6.9m + gain of interest rate swap of US$2.9m). House expect better performance in subsequent qtrs of 2012 as Swiber progressively recognises its large orderbook. Half of its current US$1.2b orderbook will be booked in 2012. Swiber is eyeing new contracts to pad its earnings beyond 2012 and have factored US$1b worth of annual new contracts for 2012-14. Ytd, Swiber has won contracts worth US489m. Overall, grp maintain TP of $0.86 which is based on 7.7x 2013F’s fully diluted EPS. Peg Swiber’s valuation at 20% discount to the long-term PE mean (2003-12) of 9.5x of the offshore support vessel (OSV) owner segment of the offshore & marine sector. As Swiber gains more traction in growing its orderbook and quarterly earnings.