Ezra Holdings suffers 41% crash in profits

Hopefully it's not a total disaster.

According to OCBC, Ezra Holdings reported a 49% YoY rise in revenue to US$326.3m but saw a 41% decrease in net profit to US$7.3m in 4QFY12, such that full year net profit of US$65m was ~15% below their full year estimate.

Here's more from OCBC:

Core net profit of US$15.7m accounted for 90% of our estimate of US$17.4m. This was partly due to significantly higher administrative expenses in the quarter – the group incurred US$43m admin costs in 4QFY12 vs US$28m in 4QFY11.

The tax rate of 25% in FY12 was also higher than 18.1% in FY11 due to withholding tax expenses incurred by vessels in certain geographical regions.

Staff costs to remain elevated, but there are other positives too. The high administrative expenses were mainly due to geographical expansion of the subsea services division and higher personnel cost to support Ezra’s growing business.

Management believes that admin expenses will stay around the US$40-45m range going forward, higher than previously guided.

On a more positive note, the group expects an increase in margins in FY13 as offshore support (FY12: 90%, FY13F: 95%) and subsea (FY12: ~70%, FY13F: ~89%) vessel utilisation rises, along with higher margins for new contracts compared to those secured previously.

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