Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Balance sheet woes
CHANGE
We update for FY11 annual report; cut EPS 70-75% for FY12/13E
GOFF’s debt increased 37% in FY11 as it extended loans and advances to
its subsidiaries and for purchasing assets. Working capital was very tight
in FY11 as payments from ONGC (ONGC IN) were volatile. The subsidiaries
continue to report losses and continue to see higher investments from the
parent company (see Exhibits 1 and 3).
CATALYST
Long due delivery of jack-up rig and potential contract win
V-351, the rig originally ordered from Bharti Shipyard, continues to be
delayed with a new timeline of Jan 2012. Timely receipt of the rig and an
immediate contract would be a near-term catalyst for GOFF. We expect
V-351 to start by April 2012 at USD110,000/day. One month early charter
or a USD10,000 surprise in day rate would raise EBITDA by 4-5%.
VALUATION
Valuation attractive but operational/financial concerns prevail
Our REDUCE is mainly due to increased debt and GOFF’s limited ability to
repay it in a timely manner. We cut TP to INR105 (from INR337), to reflect
EPS revision, based on 6.5x EV/EBITDA on FY13E, in line with domestic
peers. Recent sale and purchase of assets along with purchase of new
subsidiaries with no clarity concerns us. Risk: Superior charter terms.
KEY CHART
Revenue mix mostly unsecured; risk to cashflow exists
Key Earnings Drivers & Sensitivity
We provide sensitivity of FY13E EBITDA and fair value, to
charter of V-351, rig ordered from Bharti Shipyard
We estimate 4-5% impact on EBITDA for 3-month
delay/advance in charter operations
In the best case of USD10,000 dayrate surprise along with 2-
month early charter results in 61% upside from current
levels, while a 5-month delay on weak dayrate of USD100,000
provides similar downside
The Risk Experts
Our starting point for this page is a recognition of the macro
factors that can have a significant impact on stock-price
performance, sometimes independently of bottom-up factors.
With our Risk Expert page, we identify the key macro risks
that can impact stock performance.
This analysis enhances the fundamental work laid out in the
rest of this report, giving investors yet another resource to
use in their decision-making process
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Balance sheet woes
CHANGE
We update for FY11 annual report; cut EPS 70-75% for FY12/13E
GOFF’s debt increased 37% in FY11 as it extended loans and advances to
its subsidiaries and for purchasing assets. Working capital was very tight
in FY11 as payments from ONGC (ONGC IN) were volatile. The subsidiaries
continue to report losses and continue to see higher investments from the
parent company (see Exhibits 1 and 3).
CATALYST
Long due delivery of jack-up rig and potential contract win
V-351, the rig originally ordered from Bharti Shipyard, continues to be
delayed with a new timeline of Jan 2012. Timely receipt of the rig and an
immediate contract would be a near-term catalyst for GOFF. We expect
V-351 to start by April 2012 at USD110,000/day. One month early charter
or a USD10,000 surprise in day rate would raise EBITDA by 4-5%.
VALUATION
Valuation attractive but operational/financial concerns prevail
Our REDUCE is mainly due to increased debt and GOFF’s limited ability to
repay it in a timely manner. We cut TP to INR105 (from INR337), to reflect
EPS revision, based on 6.5x EV/EBITDA on FY13E, in line with domestic
peers. Recent sale and purchase of assets along with purchase of new
subsidiaries with no clarity concerns us. Risk: Superior charter terms.
KEY CHART
Revenue mix mostly unsecured; risk to cashflow exists
Key Earnings Drivers & Sensitivity
We provide sensitivity of FY13E EBITDA and fair value, to
charter of V-351, rig ordered from Bharti Shipyard
We estimate 4-5% impact on EBITDA for 3-month
delay/advance in charter operations
In the best case of USD10,000 dayrate surprise along with 2-
month early charter results in 61% upside from current
levels, while a 5-month delay on weak dayrate of USD100,000
provides similar downside
The Risk Experts
Our starting point for this page is a recognition of the macro
factors that can have a significant impact on stock-price
performance, sometimes independently of bottom-up factors.
With our Risk Expert page, we identify the key macro risks
that can impact stock performance.
This analysis enhances the fundamental work laid out in the
rest of this report, giving investors yet another resource to
use in their decision-making process
No comments:
Post a Comment