Ezion Holdings reported a 7.0% YoY drop in revenue to US$83.7m and a 31.5% fall in net profit to US$19.8m in 2Q16, such that 1H16 net profit accounted for 52% and 45% of ours and the street’s full year estimates, respectively. Revenue was lower as a few service rigs underwent modification and routine class surveys, while bottomline was boosted by a US$14.6m gain on disposal of an asset.

The group generated operating cash flow of US$27.4m in the quarter, bringing 1H16 net operating cashflow to US$58.3m. Pending an analyst briefing later this morning, we maintain our HOLD rating but put our post-rights fair value estimate of S$0.42 under review.  

Source: OCBC Research - 11 Aug 2016