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I m p r o v e d o p e r a t i o n a l p e r f o r m a n c e …
Global Offshore (GOL) reported an improved QoQ performance for
Q2FY12 both on the revenue as well as the net profit front. GOL’s
revenues increased by 14.7% to | 52.9 crore (I-direct estimate: | 59.6
crore) while it reported a net profit of | 5.7 crore (I-direct estimate: | 6.9
crore) as against a loss of | 2.1 crore in Q1FY12. Revenues were lower
than our estimates as GOL sold its AHTS vessel MV Garware I while MV
Kailash was employed for just 21 days and MV Garware V remained idle
during the quarter. GOL reported a substantial improvement in EBITDA
margin (QoQ 1015 bps and YoY 556 bps) to 43.5%.
ƒ EBITDA margin to stabilise
During H1FY12, GOL’s EBITDA margin (38.8%) had been lower on
account of significant expense incurred on mobilisation and modification
of two of its assets i.e. MV Kailash and MV Beaucephalus for making
them suitable for new contracts. We expect the EBITDA margin to
improve in H2FY12 as these two assets are now working on new
contracts, which will run till FY15.
ƒ High proportion of long-term contracts provide comfort
GOL operates a fleet of 11 vessels, which consist of six AHTS vessels,
four OSVs and one construction barge. The company sold its AHTS
vessel Garware I during the quarter. The company has strong revenue
visibility as majority of its fleet is deployed on long-term charter contract
with contracted revenue being 92% and 66% of FY12E and FY13E
revenues, respectively.
V a l u a t i o n
At the CMP of | 82, the stock is trading at 11.4x FY13E EPS of | 7.0 and
0.6x FY13E book value of | 127. We have valued the stock at 0.8x FY13E
book value to arrive at a price target of | 101 and recommend a BUY
rating. Existing investors should also continue to hold the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
I m p r o v e d o p e r a t i o n a l p e r f o r m a n c e …
Global Offshore (GOL) reported an improved QoQ performance for
Q2FY12 both on the revenue as well as the net profit front. GOL’s
revenues increased by 14.7% to | 52.9 crore (I-direct estimate: | 59.6
crore) while it reported a net profit of | 5.7 crore (I-direct estimate: | 6.9
crore) as against a loss of | 2.1 crore in Q1FY12. Revenues were lower
than our estimates as GOL sold its AHTS vessel MV Garware I while MV
Kailash was employed for just 21 days and MV Garware V remained idle
during the quarter. GOL reported a substantial improvement in EBITDA
margin (QoQ 1015 bps and YoY 556 bps) to 43.5%.
ƒ EBITDA margin to stabilise
During H1FY12, GOL’s EBITDA margin (38.8%) had been lower on
account of significant expense incurred on mobilisation and modification
of two of its assets i.e. MV Kailash and MV Beaucephalus for making
them suitable for new contracts. We expect the EBITDA margin to
improve in H2FY12 as these two assets are now working on new
contracts, which will run till FY15.
ƒ High proportion of long-term contracts provide comfort
GOL operates a fleet of 11 vessels, which consist of six AHTS vessels,
four OSVs and one construction barge. The company sold its AHTS
vessel Garware I during the quarter. The company has strong revenue
visibility as majority of its fleet is deployed on long-term charter contract
with contracted revenue being 92% and 66% of FY12E and FY13E
revenues, respectively.
V a l u a t i o n
At the CMP of | 82, the stock is trading at 11.4x FY13E EPS of | 7.0 and
0.6x FY13E book value of | 127. We have valued the stock at 0.8x FY13E
book value to arrive at a price target of | 101 and recommend a BUY
rating. Existing investors should also continue to hold the stock.
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