Monday, July 15, 2013

Vard Holdings : Quarterly loss on difficulties in Brazil; earnings visibility remains poor (CS)

Vard Holdings Ltd
Maintain UNDERPERFORM
Price (11 Jul 13 , S$) 0.87
TP (prev. TP S$) 0.80 (0.80
Quarterly loss on difficulties in Brazil; earnings visibility remains poor


● Following a profit warning on 28 June, Vard reported a 2Q13 net loss of NKr20 mn driven mainly by execution challenges in its Brazil operations. While 2Q13 EBITDA margin of 4.1% was in line with our forecast, the company was further impacted by a NKr70 mn write-down of goodwill for its Niteroi yard in Brazil.

● In Niteroi, the remaining four vessels are expected for be delayed by a quarter on average. Vard was also impacted by higher start-up costs in its new Promar yard, as well as cost escalations for two LPG carrier hulls subcontracted to CGU-Rio Nave on a cost-plus contract.


● During the analyst briefing, management provided little clarity on the individual factors driving margins decline. There was also no margin guidance provided for 2H13, as profit could continue to be impacted until the last vessel in Niteroi is delivered in 4Q14.

● While consensus 2013 EPS has been reduced by 14% since the profit warning, we believe there could be further 30% downside. Given limited earnings visibility until the challenges are resolved, we maintain our UNDERPERFORM rating and TP of S$0.80.

First quarterly loss since IPO in 2Q13
Vard reported 2Q13 net loss of NKr20 mn driven by execution challenges in its Brazilian operations. 2Q13 EBITDA margin of 4.1% was in line with our revised forecast following the company’s profit warning on 28 June 2013. However, the company was further impacted by a write-down of remaining goodwill of NKr70 mn related to the Niteroi yard.

Execution challenges in Brazil remain
At its existing yard in Niteroi, profit was impacted by higher costs from outsourcing of hull construction to subcontractors. Although one PSV was successfully delivered in 2Q13, the remaining four vessels are expected to be delayed further by about a quarter. Vard was also impacted by an increase in start-up costs at its new Promar shipyard. In particular, there are cost escalations to the hulls for two LPG carriers which were subcontracted to CGU-Rio Nave shipyard on cost-plus contracts.

Maintain UNDERPERFORM
We lower our 2013 EPS by 20% due to write-down of goodwill and higher-than-expected taxes. Given limited earnings visibility until the challenges are resolved, we maintain our UNDERPERFORM rating and TP of S$0.80



Source/Extract/Excerpts/来源/转贴/摘录: Credit Suisse
Publish date: 12/07/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock