Singapore Stock Market News

Swiber Holdings - In "restart" mode

StockFanatic
Publish date: Thu, 14 Nov 2013, 04:24 PM
StockFanatic
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Core earnings for FY14 could decline due to the lack of orders in 2013, which, in addition with suppressed margin, brings Swiber back to where it was post GFC. The c.US$100m net proceeds from the Kreuz divestment will make hardly a dent in its high net gearing of 0.9x.

We downgrade the stock to Underperform from outperform. 9M13 net profit was below our expectations, at 64% of our FY13 forecast and consensus, mainly due to lower margins and higher tax. We cut FY13-15 EPS by 26-48% for lower order wins. Our lower target price is based on 0.6x FY14 P/BV, 1 s.d. below its 3-year mean (previously 30% below 5-year mean). Re-rating catalysts include resumption of order momentum and margin expansion.
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