Kreuz Holdings' likely to win only 30% of current tenderbook

But here's its possible ticket to the subsea sector's big league.

According to UOB Kay Hian, Kreuz’s current tenderbook remains at about US$450m-500m, unchanged from three months back. It expects Kreuz to win 20-30% of its current tenderbook.

Ytd, Kreuz has clinched US$15.5m worth of orders, bringing end-12 orderbook to US$205m.

Here's more:

Inked deal for game-changing subsea vessel. In Feb 13, Kreuz entered a conditional shipbuilding agreement with a Chinese shipyard to construct a US$113.65m deepwater subsea construction vessel.

The vessel will be equipped with dynamic positioning (DP2), enhanced saturation diving systems and deepwater capabilities.

Expected payback period of seven years. We estimate the new vessel will have a payback period of 7-10 years. As a result, we forecast an additional net profit of US$6m-11m per year, which will lift earnings by 13-23%.

Ticket into the big league. With the new subsea vessel, Kreuz will be able to undertake deepwater work in up to 3,000m of water, from 300m currently.

This will improve Kreuz’s water depth capability to match that of leading subsea contractors such as Ezra, Subsea 7 and Technip. In addition, the vessel will also allow Kreuz to ride on fast-growing deepwater capex, which is expected to more than double from US$347b in 2001-10 to US$873b in 2011-20.

Cost funded by operating cash flows and debt. Kreuz will be required to make three milestone payments of about US$11.4m each (10% of vessel cost) in 2012-14, and the remaining US$79.5m (70% of vessel cost) on delivery.

The milestone payments will be funded by operating cash flow, while the final payment will be funded by debt.

About 65% of the total vessel cost will be funded by loans with tenure of five years and annual interest rate of about 3.2%.Key Financials Year to 31 Dec (US$m) 2011 2012 2013F

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia