Kreuz / Swiber

Kreuz / Swiber: With Kreuz continuing its recent run (+5.9% today), we note that the counter’s market cap at $395.47m has exceeded that of parent Swiber’s 378.48m (owns 57.6% of Kreuz), and on an ex-Kreuz basis, Swiber’s valuations is getting rather compelling. Swiber: - Current Market cap: $378.48m - Latest reported NAV: $422.6m Kreuz: - Current Market cap: $395.47m - Latest reported NAV: $159.95m Swiber ex Kreuz valuation: 1) Swiber market cap ex Kreuz stake at (378.48 – 57.6% x $395.47) = $151m 2) Swiber NAV ex Kreuz stake at ($422.6m – (57.6% x $159.95m) )= $331m 3) Swiber P/NAV ex Kreuz = $151m/$331m = 0.45x P/ NAV Based on the above calculations, Swiber appears to be trading at more then 50% discount to its underlying book value ex Kreuz. The group reported record FY12 earnings of $45.7m (+42%) with a two-year growth visibility supported by a robust orderbook of US$1.35b and tenderbook of US$2.4b.