Ezra to gain an outrageous 80% rise in earnings

Subsea business did really well.

According to Barclays Research, it expects Ezra to deliver 80% y/y earnings growth when it reports its FY12 results on 24 October.

Here's more from Barclays Research:

This should mainly be driven by the turnaround of its subsea business, especially in 2Q and 3Q, and the recovery in profitability of its offshore support vessel segment.

Ezra continues to streamline its business with the TRIYARDS (its offshore equipment and vessel construction business) listing on the Singapore Stock Exchange today at a market cap of cS$230m, in line with our expectations.

We view this listing, which represents a c7% dividend-in-specie 'yield', as a positive for the company and for shareholders. Ezra remains a key pick in our Asia Oil & Gas coverage.

Sequential improvement in subsea margins: We expect gross margins for Ezra's subsea segment to continue their upward trend, following the change to profitability over the first three quarters of FY12 (gross profit margins in 1H12 were 5-10% and 15-20% in 3Q12).

We expect vessel utilization for its subsea construction fleet to be close to 'full' in 4Q, driving a likely sustained improvement in margins.