Kreuz’s topline rocketed 69% to USD76.8m in 3Q

Its 'strongest-ever' quarter, says analyst.

According to OSK, Kreuz delivered its strongest-ever quarter with a USD16.6m bottomline, with its 9M13 profits of USD42.0m already exceeding FY12’s USD39.7m figure.

OSK continues to expect 14-26% annual growth from FY13F-15F. The stock is currently trading at an attractive 7x P/E, 4.5x EV/EBITDA, and gearing that has dwindled to near zero.

Here's more:

Impressive showing. Kreuz’s (KRZ) topline surged 69% y-o-y to USD76.8m, fuelled by high project volume.

This in turn boosted its bottomline 60% y-o-y higher to USD16.6m and pushed up its 9M13 profits to USD42.0m, beating its full-year FY12 profit of USD39.7m.

Margins stay robust. KRZ’s margins remained strong at a 31.8% gross margin, 21.6% net margin and EBITDA margin of 30.9%. However, margins shrank 1-3ppt y-o-y as more vessels were chartered to boost revenue.

Near-term catalysts visible. Trading in KRZ and Swiber (SWIB SP, NR) shares was halted today.

While we await the news, we see two possibilities: i) KRZ ordering a new diving support vessel (DSV), as the option expires this month; or ii) a potential stake sale by Swiber.

Keep a lookout for FY15. KRZ’s new DSV will be delivered mid-FY15. We expect each DSV to contribute c. USD40m to its bottomline annually.

Investors should focus the company’s long-term growth potential. Its ability to deliver growth even at full operating capacity should assuage detractors’ fears of limited near-term growth.