Swiber Holdings (Swiber) reported a 5.4% YoY rise in revenue to US$242.1m and a 13.7% increase in gross profit to US$37.1m in 2Q13. However, higher admin, finance and other operating expenses contributed to a 72.5% fall in net profit to US$4.2m in the quarter. Stripping out one-off items, core net profit was US$3.7m in the quarter, such that 1H13 recurring income accounted for 45% of our full year estimate. Gross margins remained healthy at 15.3% in 2Q13. Swiber’s order book stood at US$1.2b as at 14 Aug 2013. Looking ahead, more orders are expected to be awarded by the end of this year. Its net gearing remains high at 0.92x, but the group is now executing well compared to its peers, and has improved substantially since its relatively difficult period in 4Q08-4Q09. Maintain BUY with S$0.86 fair value estimate.
Softer 2Q13 results after a strong 1Q13
Swiber Holdings (Swiber) reported a 5.4% YoY rise in revenue to US$242.1m and a 13.7% increase in gross profit to US$37.1m in 2Q13. However, higher administrative, finance and other operating expenses contributed to a 72.5% fall in net profit to US$4.2m in the quarter. Earnings are generally lumpy by quarter due to project executions, and the group also incurred a US$2m one-off professional fee in 2Q13. 1H13 net profit rose 2.0% and accounted for close to 40% of our full year estimate. Stripping out one-off items, core net profit was US$3.7m in the quarter, such that 1H13 recurring income accounted for 45% of our full year estimate.
Gross margin remains healthy
Gross margins remained healthy at 15.3% in 2Q13 vs 14.2% in 2Q12 and 16.1% in 1Q13. Looking ahead, margins in 2H13 should be supported by more work executed in Brunei and Indonesia. Management is guiding gross margins of 15-20%; this is influenced by the effect of any change order, type of services or number of on-going projects during the quarter.
Focusing on execution, and still bidding
YTD, the group has announced new order wins of about US$588m vs. ~US$1.7b for the whole of 2012. This brings its order book to US$1.2b as at 14 Aug 2013; US$500m of this will be recognized in 2H13 and US$400m in FY14. Looking ahead, more orders are expected to be awarded by the end of this year. Swiber’s net gearing remains high at 0.92x compared to 1.00x in 1Q13 and 0.88x in 2Q12, but it is now executing well compared to its peers, and has improved substantially since its relatively difficult period in 4Q08-4Q09. Maintain BUY with S$0.86 fair value estimate.
Swiber Holdings (Swiber) reported a 5.4% YoY rise in revenue to US$242.1m and a 13.7% increase in gross profit to US$37.1m in 2Q13. However, higher administrative, finance and other operating expenses contributed to a 72.5% fall in net profit to US$4.2m in the quarter. Earnings are generally lumpy by quarter due to project executions, and the group also incurred a US$2m one-off professional fee in 2Q13. 1H13 net profit rose 2.0% and accounted for close to 40% of our full year estimate. Stripping out one-off items, core net profit was US$3.7m in the quarter, such that 1H13 recurring income accounted for 45% of our full year estimate.
Gross margin remains healthy
Gross margins remained healthy at 15.3% in 2Q13 vs 14.2% in 2Q12 and 16.1% in 1Q13. Looking ahead, margins in 2H13 should be supported by more work executed in Brunei and Indonesia. Management is guiding gross margins of 15-20%; this is influenced by the effect of any change order, type of services or number of on-going projects during the quarter.
Focusing on execution, and still bidding
YTD, the group has announced new order wins of about US$588m vs. ~US$1.7b for the whole of 2012. This brings its order book to US$1.2b as at 14 Aug 2013; US$500m of this will be recognized in 2H13 and US$400m in FY14. Looking ahead, more orders are expected to be awarded by the end of this year. Swiber’s net gearing remains high at 0.92x compared to 1.00x in 1Q13 and 0.88x in 2Q12, but it is now executing well compared to its peers, and has improved substantially since its relatively difficult period in 4Q08-4Q09. Maintain BUY with S$0.86 fair value estimate.
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