DMG & Partners Securities in an Apr 13 research report says: "Ezra reported 2QFY12 net profit of US$22 million (+177% y-o-y, +66% q-o-q). Excluding the one-off gain from AFS investments (US$+34.8 million), forex losses (-US$4.7 million) and fair value changes (-US$0.4 million), adjusted 2QFY12 net loss of US$7.6 million was below ours and street expectations.
"The poor core earnings were attributed to selected off-hire of vessels in 2QFY12, low utilisation of subsea assets and new hires to build up the subsea business. The poor results reaffirmed our lukewarm view on the stock. While Ezra chalked up impressive revenue and order book growth, operating earnings remain poor.
"We cut FY2012-2013F core earnings by 25% and 3% to reflect lower margins. A lower target price of $1.10, pegged to 12x FY13F EPS. MAINTAIN NEUTRAL."
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