Net gearing is expected to be less than 1.0x. Ezra has about 15-20 main customers. Shell contributes 30-40% of total revenue. Weighted average charter contract tenor is about 3-3.5 years.
Recently cancelled two MFSVs with KMS and looking to cancell one MFSV contract with Keppel. The contract has not begun construction work. Ezra has paid S$3.4m deposit and contract is still under negetiation.
Ezra has loan-to-value covenants of 70-80%. The management guided that they are not in breach of any loan covenants. Before the crisis, cost of borrowing was LIBOR + 80-125 bps. For the newer contracts, current cost of borrowing has gone up to LIBOR +220 bps.
Average time charter rate for an AHTS is about US$1.95-2 per bhp (FY08: US$1.80-1.85 per bhp). Rates are softening for smaller AHTS vessels in shallow water but not so much for those operate in the deepwater.
Based on consensus forecasts, Ezra is trading at 6.4x 2010 P/E (8.1x 2009 PE) and 1.1x 2010 P/B (1.2x 2009 P/B). As of 28 Feb 09, Ezra has a net gearing of 47%.
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