Ezra’s net profit crashes 49% to US$6.8m in 1Q13

Check out what is to blame.

According to Barclays, Ezra’s 1Q13 results will be negative for the stock. 1Q13 net profit of US$6.8mn was down 49% y/y and 9% q/q. The fall in earnings was largely attributable to a surprising fall in the company’s margins.

Here’s more from Barclays:

The company recorded lower revenue q/q (US$279mn in 1Q13 vs. US$326mn in 4Q12) despite the inclusion of three new OSV vessels. There was no specific detail provided by the company, but this could be affected by the repair and maintenance of some vessels as well as the timing of recognition for some of the company’s subsea construction projects.

Gross profit margin of 18% was lower y/y and q/q (19% in 1Q12, 22% in 4Q12) which could be attributable to lower utilisation of vessels. The earnings miss was also driven by a higher-than-expected effective tax rate of 43% (vs. our estimate of 35%), due to the continued effect of withholding tax expense incurred by vessels operating in overseas waters.

The company also reported contract wins of cUS$160m, continuing the strong order momentum of the last quarter where they were awarded more than US$300mn in contracts.