Vard   

Vard Holdings

Below expectations, downgrade to Hold, TP SGD0.95. Vard’s 2Q13 results were lower than our adjusted expectations following the company’s profit guidance on 28 June 13. 2Q13 revenue came in at NOK2.9b (-1% YoY, +7% QoQ) with a net loss of NOK20m (-118% YoY, -111% QoQ). 1H13 PATMI makes up only 25% of our previous FY13F forecast. If the goodwill impairment of NOK70m is excluded, the company would have been profitable. FY13F will be a writeoff year and we think that Vard is taking this chance to kitchen sink all the negatives to position for a better FY14F recovery. Despite stock trading at only 5.7x/4.9x FY14F/15F PERs after our earnings cut, negative sentiments will weigh down on the stock. Downgrade to Hold, with TP of SGD0.95, pegged to 1.4x fwd P/B, which is -2 std dev below mean.

Has provided for losses, but Brazil profitability remains low. EBITDA margin for 2Q13 dipped to 4.1% (1Q13: 11.1%, 2Q12: 13.8%). The key reason was attributed to cost overrun for the outsourced hull construction work for Brazil yard projects. The last outsourced hull has since been delivered. Vard commented that it has used its best judgement to provide for all the potential losses for these projects in 2Q13, but also qualifies that it cannot guarantee that no other unforeseen losses may arise. We expect profitability for outstanding projects at Niteroi yard to remain low. Our FY13F EBITDA margin assumption is lowered to 7.8% (from 9.4%) resulting in a further 29% cut in our FY13F net profit forecast.

Vard remains optimistic on contract wins. Vard remains positive on securing more contracts in 2H13. YTD contract win stood at NOK4.0b. We think that a batch of PLSV awards could be imminent after Petrobras handed a total of 6 such orders to Seadrill-SapuraKencana JV and Subsea 7. We estimate that potential contract value to Vard could be worth about NOK6b.

Await contract win catalysts. We cut FY13F/14F/15F earnings by 29%/16%/12%. Expect more consensus earnings cuts which would weigh down on share price. We downgrade to hold with TP lowered to SGD0.95 as we await contract win catalysts to rerate the stock. No change in dividend policy of minimum 30% payout but no interim dividend was declared this quarter.

Source: Maybank Kim Eng Research - 12 Jul 2013

 

BINGO!!!

halleluyah      ( Date: 12-Jul-2013 09:50) Posted: Downgrade?? Peter_Pan      ( Date: 12-Jul-2013 09:49) Posted: Analysts' reports not favourable.

 

The loss this quarter definitely comes as a disappointment for me. Not something I expected also. But to sell just because of this would be rather irrational I feel. I still feel bullish on the prospects of Vard, especially when now the oil and gas industry is blooming. I don't expect this year's results to be fantastic le, but maybe next year..

 

Downgrade??

Peter_Pan      ( Date: 12-Jul-2013 09:49) Posted: Analysts' reports not favourable.

 

Analysts' reports not favourable.

 

... these three days low was $0.835 ... a potential tweezers bottom .... 

    ... Last Done: $0.850...

 

think is more to waiting for analysts' reports or recommendations before reacting.

Blanchard      ( Date: 12-Jul-2013 09:18) Posted: market is forward looking... bad 2nd qtr result seems to be priced in? now expecting more contracts to be secured...

 

对 !

Blanchard      ( Date: 12-Jul-2013 09:18) Posted: market is forward looking... bad 2nd qtr result seems to be priced in? now expecting more contracts to be secured...

 

Last post:))meeting starts soon
More contracts yet to come!!!
I am a happy old man!!发 啊 ！

 

Hoot at 0.845...now wait and stand-by

 

No show to watch... no big price movement... 

No chance for me to avg down....

Waiting for it to break 0.90 mark....

 

Those who attended the conference should know how the situation on the gound.Heard that  most analysts were  frustrated by the management.They just refused to answer most of the questions, especially on forward guidance (i.e. questions like will EBITDA margins recover, and how much etc.).  They also refused to answer questions like how much losses are due to Brazilian Promar  n Niteroi yard.

I think there cld be  downgrade from analysts in the coming days.

Trade with care.

Aberdeen123      ( Date: 11-Jul-2013 23:23) Posted: Even if there is a bounce, it could be a TA bounce as the FA is poor. JarolLo      ( Date: 11-Jul-2013 19:14) Posted: Definable very bad. Two important to consider: 1). Whether the mgt has any plan of recovery. How the BB read it, 2) whether the recent downturn price had taken full effect of the actual figures. If yes, then it's safe, failure which to tomorrow will be down some more. Bear in mind these 2 days went up a bit, may not be good for tomorrow. Could be shortist building up strength. Finally, take car

 

Have 9:30 am meeting !
Sistasss Think before you act!!!
I am a happy old man 发 啊 ！

 

market is forward looking... bad 2nd qtr result seems to be priced in? now expecting more contracts to be secured...

 

... according to the teaching " 低 估 期 间 , 买 对 , 不 买 也 对 , 卖 是 错 的 。 " .....

    ... selling now ... is not a right move ....

 

 

Vard pushed into losses by Brazil ops in Q2

VARD Holdings' two Brazil yards dragged the group into the red in its second quarter ended June 30.

  Vard Holdings, formerly known as STX OSV Holdings, reported losses attributable to equity holders of the company of 20 million Norwegian kroner from a profit position of 279 million kroner in the same period last year.

  Net profit in the first half of the year plummeted 69 per cent to 168 million kroner from 548 million kroner.

  Vard said that earnings were hammered by delays and cost overruns at its yard in Niteroi in Brazil, while its new yard Vard Promar, recorded high-pre-operational expenses.

 

I vested 600 lots average .84 发 啊 ！
Tonight last flight back to Sin! 发 啊 ！
Girls got good news! 发 啊 !
I am a happy old man!发 啊 !

 

Good morning!!!
Expect the unexpected!!!!
Get your heart ready!!!!
Cheers!!!!

 

POSITIVE OUTLOOK FOR NEW ORDER WINS IN 2H 2013

RESULTS SHORTFALL IN 2Q 2013

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Even if there is a bounce, it could be a TA bounce as the FA is poor.

JarolLo      ( Date: 11-Jul-2013 19:14) Posted: Definable very bad. Two important to consider: 1). Whether the mgt has any plan of recovery. How the BB read it, 2) whether the recent downturn price had taken full effect of the actual figures. If yes, then it's safe, failure which to tomorrow will be down some more. Bear in mind these 2 days went up a bit, may not be good for tomorrow. Could be shortist building up strength. Finally, take care uncleschampy      ( Date: 11-Jul-2013 18:48) Posted: not really good at reading reports, but isnt this very bad ? Will tomorrow crash ? [IMG]http://i41.tinypic.com/mjwnec.png[/IMG]