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D i s a p p o i n t i n g o p e r a t i n g p e r f o rm a n c e…
Great Eastern Shipping (GE Shipping) reported a performance, which was
below estimates on both revenue and profitability front. GE Shipping
reported a flattish topline with QoQ growth of 0.4% at | 678.8 crore (Idirect estimate: | 697.4 crore) while net profit declined by 83% to | 27.3
crore (I-direct estimate: | 136.5 crore). The significant decline in net profit
was mainly on account of lower EBITDA margin and higher interest cost
(additional interest to the tune of | 57 crore) on account of exchange
fluctuation. The EBITDA margin declined 702 bps, which led to a 17%
decline in EBITDA to | 223 crore. Depreciation also increased by 13% to |
138.8 crore further negatively impacting the net profit for the quarter.
ƒ Fleet status
During the quarter, GE Shipping acquired two dry bulk carriers and
subsequent to the quarter sold one product carrier. The total shipping
fleet now stands at 35 vessels aggregating 2.66 million dwt with an
average age of 8.1 years. Over the next two years, the company will be
adding six offshore vessels consisting of two AHTS, three OSVs and one
rig taking its offshore fleet to 25 vessels.
ƒ Earnings revision
We have revised our earnings estimates for GE Shipping to factor in the
impact of a) changes in the fleet b) lower EBITDA margin c) change in
exchange rate assumptions for FY12E and FY13E and d) some other
minor changes. We have revised downward our earning estimate for
FY12E by 28% to | 32.2 and FY13E earning estimate by 27% to | 36.9.
V a l u a t i o n
At the CMP of | 224, the stock is trading at 6.1x FY13E EPS of | 36.9 and
0.50x FY13E book value of | 449. We have valued GE Shipping on P/BV
and assigned a multiple of 0.55x (Q1FY12: 0.6x) with a price target of |
247. We recommend a BUY rating on the stock. Existing investors should
continue to hold the stock
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
D i s a p p o i n t i n g o p e r a t i n g p e r f o rm a n c e…
Great Eastern Shipping (GE Shipping) reported a performance, which was
below estimates on both revenue and profitability front. GE Shipping
reported a flattish topline with QoQ growth of 0.4% at | 678.8 crore (Idirect estimate: | 697.4 crore) while net profit declined by 83% to | 27.3
crore (I-direct estimate: | 136.5 crore). The significant decline in net profit
was mainly on account of lower EBITDA margin and higher interest cost
(additional interest to the tune of | 57 crore) on account of exchange
fluctuation. The EBITDA margin declined 702 bps, which led to a 17%
decline in EBITDA to | 223 crore. Depreciation also increased by 13% to |
138.8 crore further negatively impacting the net profit for the quarter.
ƒ Fleet status
During the quarter, GE Shipping acquired two dry bulk carriers and
subsequent to the quarter sold one product carrier. The total shipping
fleet now stands at 35 vessels aggregating 2.66 million dwt with an
average age of 8.1 years. Over the next two years, the company will be
adding six offshore vessels consisting of two AHTS, three OSVs and one
rig taking its offshore fleet to 25 vessels.
ƒ Earnings revision
We have revised our earnings estimates for GE Shipping to factor in the
impact of a) changes in the fleet b) lower EBITDA margin c) change in
exchange rate assumptions for FY12E and FY13E and d) some other
minor changes. We have revised downward our earning estimate for
FY12E by 28% to | 32.2 and FY13E earning estimate by 27% to | 36.9.
V a l u a t i o n
At the CMP of | 224, the stock is trading at 6.1x FY13E EPS of | 36.9 and
0.50x FY13E book value of | 449. We have valued GE Shipping on P/BV
and assigned a multiple of 0.55x (Q1FY12: 0.6x) with a price target of |
247. We recommend a BUY rating on the stock. Existing investors should
continue to hold the stock
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