Company Highlights

Ezra Holdings: EOC has clinched a US$272.1m deal from Hess E&P through EOC's Malaysian agent, Larizz Petroleum Services Sdn Bhd. Announcing the contract win on 14 Nov 12, Ezra said the letter of award entails the deployment of the floating production, storage and offloading (FPSO) vessel Lewek Arunothai on a three-year fast-track gas production project in the North Malay Basin, Malaysia. The said agreement has extension options of up to three years, with a potential of another US$271.1m contract should the full extension be exercised. The said FPSO vessel will be used to support early production activities and is targeted to be on station from mid- 13. (Source: The Business Times)

GLP: Net profit for 2QFY13 fell 3.1% yoy to US$195m (S$238m), as higher costs offset strong revenue. However, the company expects the expansion to Brazil and the pending J-Reit flotation to treble GLP's assets under management to US$7.2b. Revenue for 2QFY13 rose 24.5% yoy to US$173m, due mainly to higher rents, the completion of projects in China, and a sustained performance from its properties in Japan. However the additional leasable area also led to increases in property-related expenses. With an expanded portfolio and new developments, the company also incurred higher staffing and professional costs. (Source: The Business Times)

STX OSV:
Net profit for 3QFY12 fell 39% yoy to NOK228m (US$39.56m). Turnover fell 27% yoy to NOK2.46b, mostly attributable to fluctuations from projects under construction. Net profit for 9M12 profit decreased 18.6% yoy to NOK778m, while turnover declined 7.4% yoy to NOK8.61b. EPS for 9M12 was 4.16 S cents, down 7.07 S cents yoy. (Source: The Business Times)


Olam International- 1QFY13: Strong operating performance offset by higher finance costs.

(OLAM SP/BUY/S$1.76/Target: S$2.38)
FY12F PE (x): 11.6
FY13F PE (x): 8.8

1QFY13 net profit rose 26% to S$43m. Net profit for the quarter formed 8.4% and 10.1% of our and consensus FY13 forecasts respectively. (Note: Due to seasonality, 1Q profit accounts for 5-10% of full-year’s.) Core net profit, excluding both coupons on perpetual securities and biological asset gains, fell 17% at S$28.3m. For comparison purposes, we exclude the biological asset gains in this quarter’s results because of the change in the period of recognition for these gains from half-yearly to quarterly since 3QFY12.

Broadly in line with consensus expectation. Although it appears that Olam’s net profit beat consensus estimate of S$28m, we believe the results were in line if the net gains on biological assets (S$10m) are excluded. The recent sell-down in its share price may be overdone as it is commonly compared with Noble Group, which reported weaker-than expected results.

Maintain BUY. We reduce our target price from S$2.55 to S$2.38 on our lowered earnings. We also roll forward our valuation to 13.5x average FY13/14F PE (previous: 14.0x FY13F PE).