Results within expectations, Maintain Buy. FY12 results were generally within expectations with revenue of USD158.7m (+48.4% YoY) and corresponding net profit of USD78.8m (+35.7% YoY). Excluding the USD13.4m one-time gain from disposal of assets, recurring net profit works out to USD65.4m, which is within our forecast of USD65.9m. Ezion also proposed final dividends of 0.10 SG cts/sh. Overall, this set of results is more of a non-event. Maintain Buy but our TP, which is pegged to 12x FY13F recurring earnings, is lowered to SGD2.26 due to adjustments in project schedule.

Some schedule changes. Some of its projects will be delayed but some has been brought forward. Notably, units 14 and 15 which were scheduled for 4Q12 and 1Q13 would now start in 2Q13. This would result in about 2-3 months of loss income opportunities of about USD6-7m, based on our estimate. However, units 20 and 21 (50% ownership) would be starting about a month earlier. In the offshore logistics support segment, the GLNG project is delayed till April while APLNG project is expected to start earlier. We adjusted our forecasts for the revised project schedule which resulted in a 2% fall and a 3% rise in FY13F and FY14F net profit forecasts respectively.

Gearing to trend up. Net gearing at FY12 stood at 0.76x. Management mentioned the intention to leverage more on its balance sheet for future projects. Net gearing level is expected to trend above 1.0x in FY13 if more projects were to come in. Once again, we believe that given the relatively secure operating cashflows, balance sheet risks are well under control.

Maintain Buy, still expecting contract flows to be strong. We remain positive on contract flows. After announcing 2 contracts YTD, we think that more would come in the next few months. Our FY13F/14F net profit numbers are adjusted by -2%/+3% due to rescheduling of project contributions. The stock remains a Buy.

Source: Maybank Kim Eng Research - 22 Feb 2013