Ezra Holdings to deliver 24% revenue growth for 1Q13: Barclays

Guess what segment will lead the pack.

According to Barclays, it expects Ezra to deliver 24% y/y earnings growth when it reports its 1Q13 results on 14 January. Barclays also notes that this should be driven by the strong performance of its subsea construction division as well as a potential improvement in its offshore support vessel (OSV) segment.

Here’s more from Barclays:

The OSV segment’s sluggish performance in FY12 was overshadowed by the strong performance of its subsea segment. With a marginal improvement in day rates, an increase in vessel utilization and reduced maintenance down time, we expect a significantly better performance from this division. Ezra remains a key pick in our Asia Oil & Gas coverage. Reiterate OW. 

4Q12 segment margins for Ezra’s OSV segment were 10%, due to a high level of maintenance and special surveys for some vessels which caused vessel downtime and higher costs.

With the recent bottoming-out of day rates and the improvement in overall utilization rates, we expect the performance of this segment to improve. However, we expect the improvement to be back-end loaded to 2H13 due to 2H seasonally being the stronger half for the company.

We expect Ezra’s subsea segment to pick up where it left off last year, with the increase in subsea construction vessel utilization to further improve segment margins and profitability. Gross margins for the segment were in the range of 15-20% in 4Q12 and we expect this range to be at least sustained this quarter.

We expect the company to possibly announce further contract wins for its subsea construction segment following a strong 4Q12, when cUS$300mn in contracts was announced. With the volume of subsea tenders staying robust, we would expect the strong order momentum to continue into 2013. “