14 August 2013

KREUZ - Net Profit Increased 9.6% on the Back of US$76.4M Revenue - Aug 2013

Summary of the Half Year Performance of KREUZ
  • Net Profit increased 9.6% to US$14.6 million in 2Q2013 from US$13.3 million in 2Q2012  
  • Rise in SURF activities lifted turnover for 2Q2013 by 24.7% to US$76.4 million  
  • Strong profit margins  
  • Gross Profit, Net Profit and EBITDA margins at 29.2%, 19.1% and 29.0% respectively in  2Q2013 
  • In HY2013, Net Profit also rose by 7.8% to US$25.5 million  
  • Low gearing ratio (gross) at 14.0%  
  • As at August 13, 2013, Kreuz’s order book stands at approximately US$145.0 million
Management Opinion On The Industry's Trend 

“In line with the industry’s trend towards deepwater subsea work, the ongoing construction of our new state-of-the-art  Dynamic Positioned Multi-purpose Support Vessel is on schedule with an expected delivery in 2015. The vessel with a  capacity for operating two deepwater ROVs and heave compensated cranes for working in water depths of up to 3,000  metres, shall complement Kreuz’s ability in performing deepwater SURF with the ongoing shallow water projects.  “In the past quarter, Kreuz has successfully completed its first subsea dry hyperbaric habitat welding project, at a water  depth of 140 meters, and overcoming technical challenges associated with welding at deep depths.    Coupled with a  number of ongoing Construction, IRM and SURF projects, Kreuz is well positioned to continue its quest for future  growth.”  - Mr. Kurush Contractor

For more detailed information, please go to this link.

My View

Kreuz still depends largely on Swiber, its mother company. With SURF activities continue to shine in next few quarters, I believe KREUZ will have another record year this year. With about 9.00 US Cent annualized EPS and about 6-7 times PE, I believe Kreuz is still considered one of the cheapest counters in the O&G industry, with concentrated risk in getting most of its revenue from Swiber Group. Let's see if Kreuz can diversify its client base so that it will not be affected by fall down of single customer. 

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