Ezion Holdings reported a 16.4% YoY fall in revenue to US$68.6m and a net loss of US$12.7m in 1Q17, due to lower gross profit margin of 12.8% in the quarter, as well as US$13.3m net forex loss as warned in the group’s earlier profit guidance. The strengthening of the SGD against the USD resulted in forex losses on the group’s notes payable.

While not expecting the charter rates for its fleet to recover quickly, management is seeking to improve the utilisation of its fleet in 2H17. It is also working with potential partners on co-ownership of some assets. We will attend a briefing to obtain more details from management.

Prior to this set of results, we had a BUY rating with S$0.54 fair value estimate on the stock.

Source: OCBC Research - 12 May 2017