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Wednesday, September 17, 2014

Swissco’s entry into liftboat market a pleasant surprise, says CIMB

Source: http://www.theedgesingapore.com/the-daily-edge/business/49995-swisscos-entry-into-liftboat-market-a-pleasant-surprise-says-cimb.html

Swissco Holdings’ entry into the liftboat market was faster than expected and a pleasant surprise, says CIMB.

“With the group’s explosive growth and ability to connect the dots ala Ezion, we recommend investors to back the ‘master’,” CIMB analysts Lim Siew Khee and Yeo Zhi Bin say in a note.

“After all, Ezion’s seeds germinated in KS Energy, which was one of the pioneers for rig and liftboat leasing. That essence is now effectively in Swissco following recent corporate actions.”

Swissco, which owns and operates a fleet of offshore support vessels, tugs and barges, said yesterday it had acquired its first liftboat, for US$56 million ($70 million).

The self-propelled liftboat is expected to be completed in two years and will be deployed in Southeast Asia by a shipyard.

“We expect charter rates and profitability of the liftboat to be similar to Ezion’s – revenue of US$15m per annum and earnings of US$9 million,” according to Lim and Yeo, who have an “add” rating and $1.35 price target on Swissco.

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