Triyards, Emas Offshore bag new orders but post muted Q3 results
Singapore
THE two Singapore-listed subsidiaries of offshore services group Ezra Holdings have announced new contract wins while posting subdued third-quarter results amid ongoing softness in the energy industry.
Triyards, Ezra's fabrication arm, said on Tuesday that it had bagged two orders for large liftboats worth US$175 million in total. This reflected growing demand for this vessel type, Triyards chief executive Chan Eng Yew said in a statement. Liftboats, which are self-propelled, are used in the production stage of the oil and gas supply chain in shallow waters.
The company saw net profit for the three months to May 31 sink 14 per cent from the previous year to a worse-than-expected US$5.42 million, which it put down partly to higher administrative expenses.
This drop was even though revenue for the period climbed 16 per cent to US$63.9 million, which Triyards attributed to four liftboats that had "progressed into advanced stages of construction". Mr Chan said the firm would continue to diversify.
Earnings per share (EPS) for the nine months to May 31 fell to 5.83 US cents from 7.24 US cents the previous year - Triyards did not disclose Q3 EPS - while net asset value (NAV) per share grew to 61.89 US cents as at May 31 this year from 57.37 US cents as at Aug 31, 2014.
Analysts said on Tuesday that the company's Q3 results were below expectations, though they noted that Triyards had a relatively low net gearing ratio of 0.3 time.
"There may be concerns over whether they can continue that order-win momentum in the next few quarters. There's no positive short-term catalyst but long-term investors can accumulate at these attractive valuation levels," KGI Fraser analyst Joel Ng told The Business Times.
OCBC Investment Research analyst Low Pei Han said in a note on Tuesday that, pending an analyst briefing, she maintained her "buy" rating but put her fair value estimate of S$0.60 under review.
Triyards' sister company Emas Offshore also announced three contract wins worth over US$24 million (including options) late on Monday night, though two of those awards were from a unit of parent company Ezra.
Emas Offshore, which is dual-listed on the Oslo bourse and the Singapore Exchange, said in a statement that one charter win was in West Africa and the other two were in Thailand. Its Thailand contracts were both awarded by Emas Energy, a unit of Ezra's well services division, Emas said, adding that it won both after a "competitive tendering process".
"Our strategy of focusing our efforts in West Africa where offshore activities remain healthy is paying off," said Emas Offshore chief executive Jon Dunstan in a statement. "We continue to take steps to reduce costs ... and increase focus on vessel utilisation," he added in a separate press release. The charters have an average duration of about 1.1 years and are expected to start in Q4 of the group's FY 2015, which is June through August this year.
The group's Q3 after-tax profit was US$5.18 million, compared with the US$182,000 it recorded the same time last year. However, that jump was largely due to a bigger contribution from associates. Profit from operations actually fell 41 per cent from the previous year to US$1.89 million.
Revenue also slid 15 per cent year-on-year to US$59.24 million for the three months ended May 31, mainly due to weakness in two of its shallow water offshore support vessel segments, Emas Offshore said. Its Q3 EPS came in at 0.012 US cent, up from 0.001 US cent last year. NAV per share was US$1.15 as at May 31, against US$2.84 as at Aug 31, 2014.
Triyards shares rose half a cent to S$0.405 while Emas Offshore also gained half a cent at S$0.34 on Tuesday.
