Ezra Holdings reported its 1QFY14 results this morning, with revenue growing 21.9% YoY to US$339.8m (25% of our full-year estimate) but PATMI declined 6.1% to US$6.3m. However, if we strip out exceptional items such as forex losses and a gain on dilution of interest in an associated company, we estimate core PATMI to come in at US$6.7m, or a 57.2% YoY jump.
This formed ~20% of our FY14 core PATMI forecast, which we view as in line with our expectations. Ezra’s Subsea Services division was its main revenue driver for 1QFY14, with a US$59.5m revenue increase thanks to more projects undertaken, additional variation orders and contribution from two new subsea construction vessels (delivered in 4QFY13).
This division also managed to record its second consecutive quarter of operational profit. We will provide more details after the conference call with management.
For now, we have a SELL rating and S$0.99 fair value estimate on Ezra.
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