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http://content.icicidirect.com/mailimages/ICICIdirect%20GreatOffshore_Q3FY12.pdf
I n t e r e s t c o s t c o n t i n u e s t o d e n t p r o f i t s …
Great Offshore (GOL) reported a 5% QoQ increase in standalone revenue
to | 211 crore (I-direct estimate: | 203 crore) while net profit registered a
27% rise to | 8.3 crore (I-direct estimate: | 9 crore). GOL’s EBITDA margin
declined for the second continuous quarter with a 200 bps QoQ decline to
41.6% (I-direct estimate: 39.4%). The QoQ decline in EBITDA margin has
led to EBITDA remaining flattish at | 87 crore. Though the depreciation
remained flat, interest cost continued its upward trend and increased by
8% QoQ to | 48.1 crore. GOL’s profitability has been burdened by
increasing interest cost for the past few quarters. GOL’s debt has been
spiralling and increased from | 2343 crore in FY10 to | 3218.5 in FY11.
Interest as a percentage of EBITDA has risen from 36.6% in Q3FY11 to
54.9% in Q3FY12, which has severely pressurised the bottomline. For
Q3FY12, GOL reported a loss before extraordinary income of | 10.9 crore.
The company has accounted for an extraordinary profit on sale of assets
to the tune of | 19.2 crore, which has enabled it to report a net profit of
| 8.3 crore. For 9MFY12, GOL has reported revenues to the tune of | 630
crore and a net profit of | 69.6 crore, which has been primarily driven by
extraordinary profit on sale of ships of | 67 crore.
ƒ Fleet status and coverage
GOL had sold three vessels in Q2FY12 reducing the fleet size to 44
vessels. A drilling rig and a PSV are on order and are expected to join
the fleet by December 2012. Drilling Rig Badrinath is undergoing
refurbishment and is expected to join the fleet in March 2012.
V a l u a t i o n
At the CMP of | 124, the stock is trading at 5.5x FY13E EPS of | 22.4 and
0.36x FY13E book value of | 348. GOL’s profitability has been driven by
exceptional incomes in FY11 (| 58 crore) and 9MFY12 (| 67 crore), which
is a serious cause for concern as a majority of the operating profits have
been eaten out by Interest and depreciation costs. We have valued the
stock at 0.35x FY13E book value to arrive at a price target of | 122 and
have a HOLD rating on the stock
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect%20GreatOffshore_Q3FY12.pdf
I n t e r e s t c o s t c o n t i n u e s t o d e n t p r o f i t s …
Great Offshore (GOL) reported a 5% QoQ increase in standalone revenue
to | 211 crore (I-direct estimate: | 203 crore) while net profit registered a
27% rise to | 8.3 crore (I-direct estimate: | 9 crore). GOL’s EBITDA margin
declined for the second continuous quarter with a 200 bps QoQ decline to
41.6% (I-direct estimate: 39.4%). The QoQ decline in EBITDA margin has
led to EBITDA remaining flattish at | 87 crore. Though the depreciation
remained flat, interest cost continued its upward trend and increased by
8% QoQ to | 48.1 crore. GOL’s profitability has been burdened by
increasing interest cost for the past few quarters. GOL’s debt has been
spiralling and increased from | 2343 crore in FY10 to | 3218.5 in FY11.
Interest as a percentage of EBITDA has risen from 36.6% in Q3FY11 to
54.9% in Q3FY12, which has severely pressurised the bottomline. For
Q3FY12, GOL reported a loss before extraordinary income of | 10.9 crore.
The company has accounted for an extraordinary profit on sale of assets
to the tune of | 19.2 crore, which has enabled it to report a net profit of
| 8.3 crore. For 9MFY12, GOL has reported revenues to the tune of | 630
crore and a net profit of | 69.6 crore, which has been primarily driven by
extraordinary profit on sale of ships of | 67 crore.
ƒ Fleet status and coverage
GOL had sold three vessels in Q2FY12 reducing the fleet size to 44
vessels. A drilling rig and a PSV are on order and are expected to join
the fleet by December 2012. Drilling Rig Badrinath is undergoing
refurbishment and is expected to join the fleet in March 2012.
V a l u a t i o n
At the CMP of | 124, the stock is trading at 5.5x FY13E EPS of | 22.4 and
0.36x FY13E book value of | 348. GOL’s profitability has been driven by
exceptional incomes in FY11 (| 58 crore) and 9MFY12 (| 67 crore), which
is a serious cause for concern as a majority of the operating profits have
been eaten out by Interest and depreciation costs. We have valued the
stock at 0.35x FY13E book value to arrive at a price target of | 122 and
have a HOLD rating on the stock
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