Ezra

Ezra: CIMB has results preview. CIMB Downgrades to UnderPerform from OutPerofm with $0.90 TP. Houseexpect Ezra’s 2Q13 results to remain weak as subsea activities in the North Sea could be affected by poor weather conditions from Dec-Feb. House have slashed EPS by 24-38% for FY13-15 on lower subsea margin as it could take longer to beef up this new segment. Add that the shortage of experienced subsea personnel could also hinder Ezra in winning sizeable and good projects to build up its track record and attract good engineers. Subsea 7 and Technip have listed staffing as the industry’s. Conclude that Investors should remain cautious on Ezra as earnings could disappoint. Key risks include 1) margin pressure from stiff competition; and 2) delays and cost overruns for subsea projects.