TP: S$2.20
Value of contracts estimated at NOK1.3b. Siem Offshore has exercised its options with STX OSV for the design and construction of two offshore subsea construction vessels (OSCVs). The vessels will be based on STX OSV’s OSCV 11 design. The value of the contracts was not disclosed. DOF awarded STX OSV a contract for one OSCV 11 vessel for ~NOK650m in Mar 2012. Assuming similar order value per vessel, we estimate the two new orders from Siem Offshore to be valued at NOK1.3b (US$227m). We estimate that the new orders lifted STX OSV’s YTD order win to NOK9.6b, 80% of our full-year forecast of NOk12b, and unbilled order book to NOK20.5b. We maintain FY12-14F EPS estimates, Buy rating and TP at S$2.02. Our TP is pegged to 12x FY12F P/E. We like STX OSV for its strong execution, growing order book visibility and positive order outlook.
Strong demand for OSVCs. The new vessels are scheduled to be delivered in 2Q 2014 from STX OSV Brattvaag in Norway. The hulls will be constructed at STX OSV Tulcea in Romania. Siem Offshore is a repeat customer. Apart from the new orders, STX OSV is currently building two OSCVs in Norway and two platform supply vessels (PSVs) in Brazil for Siem Offshore.
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