Triyards Holdings reported a 38% YoY rise in revenue to US$78.1m but saw a 25% decline in net profit to US$6.2m in 1QFY16, such that topline and bottomline accounted for 25% and 24% of our full year estimates, in line with expectations. We note that 1QFY15 was boosted by a US$3.9m negative goodwill which was oneoff in nature; stripping this out, net profit actually rose about 30% YoY.

Net gearing remained low at 0.38x in the quarter; about 92% of the group’s borrowings relates to working capital financing. Due to the group’s focus on the liftboat business as well as its more diversified offering, it is faring relatively well compared to other O&M peers. Pending an analyst briefing later, we maintain our BUY rating but put our fair value estimate of S$0.61 under review.

Source: OCBC Research - 8 Jan 2016