Ezra Holdings reported a 3% YoY drop in revenue to US$390.7m and a 30% fall in gross profit to US$45.6m in 3QFY15. Operating profit fell 81% to US$3.7m, leading the firm to sustain a net loss of US$3.0m in the quarter. Excluding one-off items such as loss on derivatives, we estimate core net profit to be about US$4.3m. Results were below expectations and we may look to adjust our estimates lower.

Looking ahead, the operating environment of the subsea division is expected to be challenging, and the OSV segment is also expected to see lower charter rates as well. As mentioned in our earlier report, our fair value estimate will fall to S$0.25 post the rights issue, but pending more details from management in an analyst briefing, we maintain our HOLD rating and put our fair value estimate under review.

Source: OCBC Research - 10 Jul 2015