Why Ezra Holdings' sinking PATMI in 1QFY14 isn't worrisome

Core PATMI up an impressive 57.2%.

Ezra Holdings posted its 1QFY14 results which revealed revenue grew 21.9% YoY to US$339.8m but PATMI declined 6.1% to US$6.3m.

"However, if we strip out exceptional items, we estimate core PATMI to come in at US$6.7m, or a 57.2% YoY jump," notes OCBC Investment Research.

"This formed ~20% of our FY14 core PATMI forecast, which we view as in-line with our expectations," the research firm added.

OCBC Investment Research said Ezra’s Subsea Services division was its main revenue driver for 1QFY14, and management remains upbeat on prospects for this business in FY14 and FY15. Ezra’s net orderbook was >US$2b as at 30 Nov 2013, of which 50-65% belongs to its Subsea Services division.