Singapore Stock Market News

Swiber Holdings - Going deep

StockFanatic
Publish date: Fri, 31 May 2013, 04:56 PM
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Having established itself in shallow-water offshore construction, Swiber is considering going into deeper waters and sourcing for a new deep-water pipelay vessels. This could be a longer-term catalyst for the stock.

We maintain our Outperform and target price, still based on 0.9x CY13 P/BV (30% below 5-year mean). Operationally, we believe that Swiber is ready to take the next step in going into deeper waters. Though execution in deepwater is still untested, Swiber could use the next three years to beef up its crew and expertise while waiting to take delivery of the vessel. But a cash call is likely in 2015-16 as net gearing is stretched at 1.1x.
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