SEAMEC Ltd. Q4CY2008 Result Update ; Results sharply above estimates ; BUY ; Target : Rs73

SEAMEC Ltd.

 

Results sharply above estimates

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BUY

 

CMP: Rs48                                     Target Price: Rs73

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Seamec has reported net profit Rs547 mn in Q4CY2008 which is sharply above our expectation on account of higher than expected utilisation of fleet during the quarter. Revenues for the quarter stood at Rs1044 million registering a growth of 369% yoy as Seamec had all of its four vessels full operational during the quarter as compared to just two vessels operating partially in Q4CY2007. Driven by full utilisation of fleet, higher day rate for Seamec Princess and currency appreciation, EBITDA for the quarter stood at Rs612 mn as compared to loss in Q4CY2007.  As per management guidance all of its vessels will be fully available for operation in CY2009. Consequently on expected full utilisation of fleet and currency appreciation we are upgrading our earnings estimates for CY2009 by 20% to Rs24.3 per share. At current levels the stock is trading at undemanding valuations of 2X its CY2009 earnings and P/B of 0.4X. The company has a market cap of USD 34 million and it is already sitting on committed contracts worth 40 million dollars.   We maintain our BUY recommendation with a revised price target of Rs73.