Triyards Holdings (Triyards) reported a 61% YoY drop in revenue to US$65.7m and a 55% decrease in net profit to US$7.5m in 3QFY13, bringing 9MFY13 net profit to 72% of our full year estimate, and in line with expectations. The fall in revenue was mainly due to lower revenue recognized for the Lewek Constellation – construction progress for this vessel had peaked in 2HFY12. Meanwhile, gross profit margin was higher at 19.2% in 3QFY13 vs 12.5% in 3QFY12. Management reiterated that it is receiving healthy enquiries for the construction of SEUs, and received favourable feedback during its roadshows of its 3rd generation SEU. We await new orders and news of a potential yard acquisition as the group pares down its debt. Maintain BUY with S$1.07 fair value estimate.
No surprises in 3QFY13 results
Triyards Holdings (Triyards) reported a 61% YoY drop in revenue to US$65.7m and a 55% decrease in net profit to US$7.5m in 3QFY13, bringing 9MFY13 revenue and net profit to US$198.4m and US$21.1m, respectively. Results were in line, with 9MFY13 net profit accounting for 72% of our full year estimate. The fall in revenue was mainly due to lower revenue recognized for the Lewek Constellation – construction progress for this vessel had peaked in 2HFY12. Gross profit margin in 3QFY13 was higher at 19.2% compared to 12.5% in the year ago period, as 1) certain SEU projects which commenced production in the year had higher profit margins, 2) there was additional work on an OSV and offshore fabrication project, and 3) there was undertaking of ship repair work.
Updates on order book and vessel completion
The group’s net order book stood at US$264m as of end May 2013, comprising three SEUs (deliveries in FY14) and the Lewek Constellation. Out of this net order book figure, Lewek Constellation accounts for less than a third. After the crane installation and multi-lay system installation, we expect this subsea construction vessel to be delivered around mid 2014.
Management upbeat on outlook
Management reiterated that it is receiving healthy enquiries for the construction of SEUs as such units gain traction in the region, and is in the final stages of negotiation with potential customers. The group has also received enquiries for building customized supply vessels. Meanwhile, management mentioned that it received favourable feedback from recent roadshows of its 3rd generation SEU (which has drilling capabilities).
Maintain BUY
With the completion of its floating dock in Apr, the group has completed its first ship repair work for the 1,554dwt OSV Mermaid Challenger. The group has also pared down its net gearing from 0.6x as of end FY12 to 0.3x as of end May 2013, as we await possible news of a yard acquisition. Maintain BUY with S$1.07 fair value estimate, based on 8x FY13/14F earnings.
Triyards Holdings (Triyards) reported a 61% YoY drop in revenue to US$65.7m and a 55% decrease in net profit to US$7.5m in 3QFY13, bringing 9MFY13 revenue and net profit to US$198.4m and US$21.1m, respectively. Results were in line, with 9MFY13 net profit accounting for 72% of our full year estimate. The fall in revenue was mainly due to lower revenue recognized for the Lewek Constellation – construction progress for this vessel had peaked in 2HFY12. Gross profit margin in 3QFY13 was higher at 19.2% compared to 12.5% in the year ago period, as 1) certain SEU projects which commenced production in the year had higher profit margins, 2) there was additional work on an OSV and offshore fabrication project, and 3) there was undertaking of ship repair work.
Updates on order book and vessel completion
The group’s net order book stood at US$264m as of end May 2013, comprising three SEUs (deliveries in FY14) and the Lewek Constellation. Out of this net order book figure, Lewek Constellation accounts for less than a third. After the crane installation and multi-lay system installation, we expect this subsea construction vessel to be delivered around mid 2014.
Management upbeat on outlook
Management reiterated that it is receiving healthy enquiries for the construction of SEUs as such units gain traction in the region, and is in the final stages of negotiation with potential customers. The group has also received enquiries for building customized supply vessels. Meanwhile, management mentioned that it received favourable feedback from recent roadshows of its 3rd generation SEU (which has drilling capabilities).
Maintain BUY
With the completion of its floating dock in Apr, the group has completed its first ship repair work for the 1,554dwt OSV Mermaid Challenger. The group has also pared down its net gearing from 0.6x as of end FY12 to 0.3x as of end May 2013, as we await possible news of a yard acquisition. Maintain BUY with S$1.07 fair value estimate, based on 8x FY13/14F earnings.
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