Ezra’s 2Q09 results were in-line with our expectations, with net profit up 21% y-o-y to US$14.9m, on revenue of US$63.0m. Separately, the group also announced new contract wins/extensions for their vessels, at sustained or improved day rates, which continues to showcase Ezra’s competitive strength in this segment. This is in line with our contrarian view that charter rates would remain resilient. Maintain BUY, TP unchanged at S$1.19.

Results in-line. Ezra’s 2Q09 net profit came in at US$14.9m (+21% y-o-y) on revenue of US$63.0m (+30% y-o-y, -44% q-o-q). Y-o-y revenue growth was primarily due to an expanded vessel fleet, while the large q-o-q revenue decline was due to the completion of a large project in 1Q09, and lumpy recognition of engineering and fabrication jobs. While gross margins for the respective divisions remain stable, group margins improved over 10ppt q-o-q to 36.7% due to the relatively greater contribution from the higher-margin offshore division. In-line with Ezra’s capex program, net gearing has stepped up to 0.47x from 0.35x as of end 1Q09. No interim dividend was declared.

New contract wins showcase competitive strengths. Ezra and its associate, EOC, also announced contract wins/extensions for their vessels, at sustained or improved day rates. These awards underscores Ezra’s competitive strength of operating a large, diversified and young fleet of OSVs, with 78% of the current fleet deepwater capable. Demand in this segment continues to remain firm and rates remain relatively resilient.

Maintain BUY, TP of S$1.19 maintained. We keep our earnings forecasts unchanged, as our model has already captured the impact of these contract wins. Our TP stays at S$1.19, and is based on 8x recurring FY09 PE for Ezra’s core businesses, 6x recurring FY09 PE for EOC and market value for its stake in Ezion Holdings. Maintain BUY.