KS Energy reported a 40.5% increase in revenue to S$227.3m and a net profit of S$30.1m in FY14 vs net profit of S$23k in FY13. Excluding one-off items such as disposal gains and impairment losses on PPE and trade receivables, we estimate recurring net profit to be about S$4.0m for the year, close to our estimate of S$3.6m.

As such, we judge the recent results to be in line with expectations. Looking ahead, the outlook for the offshore services sector continues to be affected by lower oil prices.

Pending more details from management, we maintain our HOLD rating but put our fair value estimate of S$0.48 under review.

Source: OCBC Research - 2 Mar 2015