Swiber Holdings, BUY S$1.03, Bloomberg: SWIB SP
Look beyond 2009
Price Target: S$ 1.42
By: Wee Lee CHONG CFA, +65 6398 7971
At a Glance
FY09 results were below expectation, due to worse than expected gross
margin for variation orders.
Price catalysts - Expect year round offshore EPCIC contract wins from
various regions in Asia.
+38% to our target price of S$1.42. Maintain BUY.
Comment on Results
Swiber’s net profit was down 11% y-o-y to US$35m in FY09. The US$8m
recurring net profit in FY09 was lower than our expectation of US$20m,
after factoring in US$7m mark-to-market and one-off insurance write-off for
Swiber’s convertible bond, and the US$33m gain from vessel disposals. The
increase in Swiber’s offshore fleet and the postponement of possible profit
recognition for a US$30m project were the key reasons for the slump in
gross profit margin to only 0.2% in 4Q09, vs. a normalized 15-25%.
Net gearing is lower y-o-y. Swiber’s net gearing has fallen to 0.86x by end
FY09, vs. 1.01x at end FY08. Still, this was higher than the 0.75x as of
end 3Q09, as Swiber took on more debt to finance the slower billings to
customer. Management guides that this was due to timing issues on project
progress and actual billings.
Recommendation
US$142m y-t-d order win in 2010. We estimate that Swiber would have won
>US$788m worth of announced and unannounced contracts (
I already unloaded all shitber stock yesterday and no plan to buy it anymore. If shitber falls below 99.5c in coming days, i may consider shorting.
I MiSSED iT when my FRiEND bOught at S$0.990.
hOpe tO PiCK iT Up at S$0.990 THiS TiME.
FY09 results for Swiber were below expectation, due to worse than expected gross margin for variation orders. Price catalysts would be year round offshore contract wins from various regions in Asia. Net gearing is lower y-o-y, at 0.86x by end FY09, vs. 1.01x at end FY08. Our analyst expects strong profit recovery in FY10. Maintain BUY and target price of S$1.42, which offers 38% potential upside.
Swiber Holdings (SWIB SP) NOT RATED
Price: S$1.03 Mkt Cap: S$523.6m Daily Vol: 16.2m 1-Yr Hi/Lo: S$0.255/1.220
4Q09: Key takeaways from analyst briefing
Analysts: Nancy Wei/Stella Tan Tel: (65) 6590-6628/6590-6629
4QFY09 results
Swiber reported a net loss of US$6.5m for 4Q09 vs. a net loss of US$8.3m in 4Q08. Excluding gain on disposal of vessels, net loss would have been US$18.0m vs. US$17.2m loss previously. Gross profit for 4Q09 was US$0.2m (4Q08: S$12.3m loss). Results were below market expectations.
Poor 4Q09 performance was due to:
* Marked-to-market and one-time issuance cost write-off of US$6.9m relating to Swiber's convertible bonds
* Low contract wins in the earlier quarters of FY09 had affected 4Q09 revenue (-3.3% yoy). In the meantime, sale & leaseback (SLB) charges increased as Swiber progressively completed its SLB programme of 15 vessels.
* BG E&P (India) contract was pushed back because of change in work scope. Higher margin work will now materialise in 4Q10 instead 4Q09.
* Admin. expenses increased by 60% yoy to US$9.6m in 4Q09 from US$6.0m in 4Q08, in line with Swiber's regional business expansion.
* Associates' contribution was a loss of US$0.04m in 4Q09 vs. a profit of US$1.1m in 4Q08.
Outlook
* Swiber's fortunes have turned the corner with massive contract wins from 4Q09 onwards, as evidenced in its sharply highly orderbook of US$769m as of 2 Mar 10 vs. US$440m in 3Q09.
* FY08-FY09's lacklustre performance mirrored the trough of the offshore EPCIC market.
* Swiber expects a recovery in EPCIC margin to 15-25% (FY09: 2.2%, FY07: 17.9%). This has factored in higher SLB vessel charges, as a result of the 15-vessel SLB programme.
* Percentage of group turnover from offshore EPCIC should expand from 64% in FY09. Though percentage of group turnover from Offshore Marine Support (FY09: 28%) would likely shrink, absolute revenue is sustainable.
* Today, Swiber has the largest offshore construction vessel fleet in the region.
* The group will continue to pursue regional expansion via joint-ventures, as this is the fastest way to penetrate new markets. Vietnam (6% of FY09 turnover) and Myanmar (3%) became sizeable markets in FY09, in addition to Singapore (10%), Malaysia (8%), Indonesia (8%), Brunei (31%) and India (26%).
Stock Valuation
Consensus EPS forecasts are 0.11 US cts and 0.13 US cts for FY10 and FY11 respectively (FY09: 7.39 US cts). At today's closing share price of S$1.03, Swiber is trading at prospective PEs of 3.7x and 5.7x. Stock is trading at P/B of 1.2x.
it means the band of 1.01-1.09 was the price range for feb.
street81 ( Date: 02-Mar-2010 23:06) Posted:
It's March now, why did they say "Shares are expected to remain in $1.01–$1.09 band, in place for whole of February."?
dealer0168 ( Date: 02-Mar-2010 22:45) Posted:
| Swiber off 2.8%; buy on weakness, says DBS Vickers |
| Written by The Edge |
| Tuesday, 02 March 2010 10:36 |
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Swiber Holdings (AK3.SG) is off 2.8% at $1.04 following lower FY09 earnings.
“FY09 results were below expectation, due to weaker-than-expected margins,” says DBS Vickers, which has “buy” call with $1.42 target, but expects revenue to bounce back strongly in FY10 as most of Swiber’s US$788 million ($1.1 billion) worth of contracts secured last year will be executed in 2010, askign investors to “buy into any post-results share price weakness.”
Swiber’s FY09 net profit was down 10.7% to US$34.7 million due to lower revenue, marked-to-market derivative loss, and one-time write-off of issuance costs for convertible bond sale.
CIMB has also lowered its target price to $1.65 from $1.72 after reducing FY10-11 EPS estimates to assume lower margins, but keeps “outperform” call, citing strong orderbook.
Shares are expected to remain in $1.01–$1.09 band, in place for whole of February.
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Oh ya, maybe typo error from them? Or?
Haha, anyway.........accumulate on weakness as most of Swiber’s US$788 million ($1.1 billion) worth of contracts secured last year will be executed in 2010.
Cheers.
street81 ( Date: 02-Mar-2010 23:06) Posted:
It's March now, why did they say "Shares are expected to remain in $1.01–$1.09 band, in place for whole of February."?
dealer0168 ( Date: 02-Mar-2010 22:45) Posted:
| Swiber off 2.8%; buy on weakness, says DBS Vickers |
| Written by The Edge |
| Tuesday, 02 March 2010 10:36 |
|
Swiber Holdings (AK3.SG) is off 2.8% at $1.04 following lower FY09 earnings.
“FY09 results were below expectation, due to weaker-than-expected margins,” says DBS Vickers, which has “buy” call with $1.42 target, but expects revenue to bounce back strongly in FY10 as most of Swiber’s US$788 million ($1.1 billion) worth of contracts secured last year will be executed in 2010, askign investors to “buy into any post-results share price weakness.”
Swiber’s FY09 net profit was down 10.7% to US$34.7 million due to lower revenue, marked-to-market derivative loss, and one-time write-off of issuance costs for convertible bond sale.
CIMB has also lowered its target price to $1.65 from $1.72 after reducing FY10-11 EPS estimates to assume lower margins, but keeps “outperform” call, citing strong orderbook.
Shares are expected to remain in $1.01–$1.09 band, in place for whole of February.
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It's March now, why did they say "
Shares are expected to remain in $1.01–$1.09 band, in place for whole of February."?dealer0168 ( Date: 02-Mar-2010 22:45) Posted:
| Swiber off 2.8%; buy on weakness, says DBS Vickers |
| Written by The Edge |
| Tuesday, 02 March 2010 10:36 |
|
Swiber Holdings (AK3.SG) is off 2.8% at $1.04 following lower FY09 earnings.
“FY09 results were below expectation, due to weaker-than-expected margins,” says DBS Vickers, which has “buy” call with $1.42 target, but expects revenue to bounce back strongly in FY10 as most of Swiber’s US$788 million ($1.1 billion) worth of contracts secured last year will be executed in 2010, askign investors to “buy into any post-results share price weakness.”
Swiber’s FY09 net profit was down 10.7% to US$34.7 million due to lower revenue, marked-to-market derivative loss, and one-time write-off of issuance costs for convertible bond sale.
CIMB has also lowered its target price to $1.65 from $1.72 after reducing FY10-11 EPS estimates to assume lower margins, but keeps “outperform” call, citing strong orderbook.
Shares are expected to remain in $1.01–$1.09 band, in place for whole of February.
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|
|
| Swiber off 2.8%; buy on weakness, says DBS Vickers |
| Written by The Edge |
| Tuesday, 02 March 2010 10:36 |
|
Swiber Holdings (AK3.SG) is off 2.8% at $1.04 following lower FY09 earnings.
“FY09 results were below expectation, due to weaker-than-expected margins,” says DBS Vickers, which has “buy” call with $1.42 target, but expects revenue to bounce back strongly in FY10 as most of Swiber’s US$788 million ($1.1 billion) worth of contracts secured last year will be executed in 2010, askign investors to “buy into any post-results share price weakness.”
Swiber’s FY09 net profit was down 10.7% to US$34.7 million due to lower revenue, marked-to-market derivative loss, and one-time write-off of issuance costs for convertible bond sale.
CIMB has also lowered its target price to $1.65 from $1.72 after reducing FY10-11 EPS estimates to assume lower margins, but keeps “outperform” call, citing strong orderbook.
Shares are expected to remain in $1.01–$1.09 band, in place for whole of February.
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haiz drop again ~ not rising to expectation ~
WiTH RiSiNG cOst and iN-flatiOn Oil PRiCE WiLL gO UP.
HiGHER Oil PRiCE is gOOd for SWiBER
whatodo ( Date: 02-Mar-2010 17:38) Posted:
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I have some questions :
1) What is the mentality of the investors for this stock? Swiber maintain goood earnings even in the bad times. Did the FY09 Q4 resuts affect them?
2) Will this downward trend continue for a few more days or is it strongly supported at 1.03/1.04? Will we see some uptrend tomorrow?
ozone2002 ( Date: 02-Mar-2010 16:29) Posted:
| US$800 million order book..no scared..keke
only problem is they screw up the execution..
vested..
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RiSiNG cOst and iN-flatiOn are gOOd fOr CHiNA prOperty AGAiN.
pharoah88 ( Date: 02-Mar-2010 17:37) Posted:
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cOsts risen in 4Q 2009.
All new Orders WiLL need HiGHER PRiCING.
The 800 Million Orders must lOck iN PRiCES with sub-cOntractOrs and charterers.
ozone2002 ( Date: 02-Mar-2010 13:59) Posted:
| Maintain Outperform on Swiber. 4Q09 core net loss of US$11.1m was below our profit projection of US$10.1m and consensus estimate of US$12.9m. The earnings shortfall was due to lower-than-expected gross margins from higher subcontractor and third-party charter costs. FY09 core net profit of US$8.7m (-67% yoy) formed 29% of our full-year number. Reported FY09 net profit of US$34.7m included US$33.1m of gains from the disposal of vessels, a US$4.5m mark-to-market financial derivative loss and a US$2.4m one-time cost for convertible bond issue. We lower our EPS estimates by 4-10% for FY10-11 to factor in lower margin assumptions. Following our adjustments, our target price dips to S$1.65 from S$1.72, still based on 12x CY11 P/E (3-year average trading band). Nevertheless, maintain Outperform as we are expecting improved execution backed by a strong order backlog of an estimated US$800m. We see stock catalysts from the further announcements of order wins and improved margins. |
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how many lots u vested? today downtrend.....
susan66 ( Date: 01-Mar-2010 23:27) Posted:
Hope so, just vested today at $1.07, if tomorrow can break $1.08 & $1.12, pace should speed up. At present, on standby mode already, get ready!  |
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I have some questions :
1) What is the mentality of the investors for this stock? Swiber maintain goood earnings even in the bad times. Did the FY09 Q4 resuts affect them?
2) Will this downward trend continue for a few more days or is it strongly supported at 1.03/1.04? Will we see some uptrend tomorrow?
ozone2002 ( Date: 02-Mar-2010 16:29) Posted:
| US$800 million order book..no scared..keke
only problem is they screw up the execution..
vested..
|
|
cOsts risen in 4Q 2009.
All new Orders WiLL need HiGHER PRiCING.
The 800 Million Orders must lOck iN PRiCES with sub-cOntractOrs and charterers.
ozone2002 ( Date: 02-Mar-2010 13:59) Posted:
| Maintain Outperform on Swiber. 4Q09 core net loss of US$11.1m was below our profit projection of US$10.1m and consensus estimate of US$12.9m. The earnings shortfall was due to lower-than-expected gross margins from higher subcontractor and third-party charter costs. FY09 core net profit of US$8.7m (-67% yoy) formed 29% of our full-year number. Reported FY09 net profit of US$34.7m included US$33.1m of gains from the disposal of vessels, a US$4.5m mark-to-market financial derivative loss and a US$2.4m one-time cost for convertible bond issue. We lower our EPS estimates by 4-10% for FY10-11 to factor in lower margin assumptions. Following our adjustments, our target price dips to S$1.65 from S$1.72, still based on 12x CY11 P/E (3-year average trading band). Nevertheless, maintain Outperform as we are expecting improved execution backed by a strong order backlog of an estimated US$800m. We see stock catalysts from the further announcements of order wins and improved margins. |
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US$800 million order book..no scared..keke
only problem is they screw up the execution..
vested..
Maintain Outperform on Swiber. 4Q09 core net loss of US$11.1m was below our profit projection of US$10.1m and consensus estimate of US$12.9m. The earnings shortfall was due to lower-than-expected gross margins from higher subcontractor and third-party charter costs. FY09 core net profit of US$8.7m (-67% yoy) formed 29% of our full-year number. Reported FY09 net profit of US$34.7m included US$33.1m of gains from the disposal of vessels, a US$4.5m mark-to-market financial derivative loss and a US$2.4m one-time cost for convertible bond issue. We lower our EPS estimates by 4-10% for FY10-11 to factor in lower margin assumptions. Following our adjustments, our target price dips to S$1.65 from S$1.72, still based on 12x CY11 P/E (3-year average trading band). Nevertheless, maintain Outperform as we are expecting improved execution backed by a strong order backlog of an estimated US$800m. We see stock catalysts from the further announcements of order wins and improved margins.
I heard somewhere 4Q was a LOSS!
Why Swiber incurred a lOss?
178investors ( Date: 02-Mar-2010 09:47) Posted:
Unload my shitbers at a loss .. think there is no gas in it anymore.. so unload all
shitbers disappoints me badly..
should heed the warning a month ago when the shitbers boy did a collar on his stocks for a loan with his banker.. dumb! shouldn't had ignored those hedges.
No more shitbers for me.. give up. |
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