See how Ezra plans to drive a 175% recovery

And how it'll support this boost.

According to DBS, Ezra posted 1Q13 recurring PATMI of US$3.2m on revenue of US$279m. This was below expectations on weak EBIT margins of 6.1% (+0.9ppt y-o-y, -3.5ppt q-o-q) as the subsea operations are being ramped up.

Notwithstanding, DBS notes positives from the improving profitability of its Offshore Support division, which generated gross margins of ~24% (+6ppt q-o-q) on better utilisation rates.

Subsea momentum builds. Separately, Ezra announced a batch of contract wins worth >US$160m from across its business divisions. This includes several subsea projects in the North Sea and Asia worth US$85m, building on its order wins momentum for the year.

Here's more from DBS:

In FY13 YTD, Emas AMC has secured c. US $400m of subsea work, vs our full-year assumption of US$1bn, lifting its current backlog to c. US$930m. The addition of two more subsea vessels in March and August will further position Ezra to ride on the surging subsea activity levels.

We have fine-tuned our FY13/14F earnings forecasts by -9%/-2% respectively. While 1Q13 disappointed, we believe Ezra’s quarterly earnings profile across FY13/14 will continue to trend upwards, albeit bumpily.

This would drive a 175%/86% y-o-y recovery across FY13/14F, supported by its large subsea and yard orderbook, as well as improving profitability of its Subsea and Offshore Support divisions in the coming quarters.