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E n h a n c e d f l e e t u t i l i s a t i o n t o d r i v e g r o w t h …
Aban Offshore (Aban) reported a below estimate performance on both
the revenue as well as profitability front. On a QoQ basis, revenues
reported a 4% increase to | 762.6 crore (I-direct estimate: | 811.5 crore)
while net profit declined by 10.7% | 79.3 crore (I-direct estimate: | 112.9
crore). Aban’s EBITDA margin declined on a QoQ basis by 257 bps to
60.2% (I-direct estimate: 63.6%). The lower-than-expected revenues can
be attributed to lower fleet utilisation owing to lesser operating days for
FPU Tahara and Aban Abraham. The decline in EBITDA margin on a QoQ
basis has been due to higher staff costs (up 5% to | 80.3 crore) and
increased expense on insurance (up 20% to | 36 crore) due to a rise in
insurance premiums. Interest and depreciation have increased by 6% and
8%, respectively, which has further led to subdued net profit.
ƒ Fleet utilisation to improve
During Q2FY12, Aban V and Aban VII were under marketing while Aban
3, which has secured a contract from ONGC, was under refurbishment
and is expected to be deployed by the end of November 2011. Aban II
and FPU Tahara are also expected to be contracted by Q4FY12. With the
deployment of these assets, fleet utilisation is expected to improve from
H2FY12 onwards.
ƒ Earnings revision
We have revised earnings estimates for Aban to factor the impact of a)
lower-than-expected performance in H1FY12, b) expected higher fleet
utilisation in H2FY12 and FY13E c) change in exchange rate assumptions
for FY12E and FY13E and d) some other minor changes. We have revised
our earning estimate for FY12E down by 19% to | 93.8 and raised FY13E
earning estimate by 43.7% to | 116.7.
V a l u a t i o n
At the CMP of | 428, the stock is trading at 3.7x FY13E EPS of | 116.7 and
0.66x FY13E book value of | 651. We have valued the stock at 0.70x
FY13E book value to arrive at a price target of | 456 and recommend a
HOLD rating. Existing investors can also continue to HOLD the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
E n h a n c e d f l e e t u t i l i s a t i o n t o d r i v e g r o w t h …
Aban Offshore (Aban) reported a below estimate performance on both
the revenue as well as profitability front. On a QoQ basis, revenues
reported a 4% increase to | 762.6 crore (I-direct estimate: | 811.5 crore)
while net profit declined by 10.7% | 79.3 crore (I-direct estimate: | 112.9
crore). Aban’s EBITDA margin declined on a QoQ basis by 257 bps to
60.2% (I-direct estimate: 63.6%). The lower-than-expected revenues can
be attributed to lower fleet utilisation owing to lesser operating days for
FPU Tahara and Aban Abraham. The decline in EBITDA margin on a QoQ
basis has been due to higher staff costs (up 5% to | 80.3 crore) and
increased expense on insurance (up 20% to | 36 crore) due to a rise in
insurance premiums. Interest and depreciation have increased by 6% and
8%, respectively, which has further led to subdued net profit.
ƒ Fleet utilisation to improve
During Q2FY12, Aban V and Aban VII were under marketing while Aban
3, which has secured a contract from ONGC, was under refurbishment
and is expected to be deployed by the end of November 2011. Aban II
and FPU Tahara are also expected to be contracted by Q4FY12. With the
deployment of these assets, fleet utilisation is expected to improve from
H2FY12 onwards.
ƒ Earnings revision
We have revised earnings estimates for Aban to factor the impact of a)
lower-than-expected performance in H1FY12, b) expected higher fleet
utilisation in H2FY12 and FY13E c) change in exchange rate assumptions
for FY12E and FY13E and d) some other minor changes. We have revised
our earning estimate for FY12E down by 19% to | 93.8 and raised FY13E
earning estimate by 43.7% to | 116.7.
V a l u a t i o n
At the CMP of | 428, the stock is trading at 3.7x FY13E EPS of | 116.7 and
0.66x FY13E book value of | 651. We have valued the stock at 0.70x
FY13E book value to arrive at a price target of | 456 and recommend a
HOLD rating. Existing investors can also continue to HOLD the stock.
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