Ezra 10 year growth plan

Wednesday, July 29, 2009

Ezra holdings shared their 10 year growth plan. The key thrust for the Ezra group from 2010 onwards would be to address the sub-sea industry. Independent industry research by Douglas-Westwood values this sub-sea market at US$162b (2009-2013).

This will be the key target market with their new Multi Functional Support Vessels (MFSVs) to be delivered in Jun 2010 and Sep 2010.

Our take:

1) No additional earnings impact. We are not accreting any new impact as we've already catered for the MSFVs' contributions. Unless contract wins announced in Jun 2010 onwards exceeds our earnings expectations, we will be retaining our current forecasts.

2) No new capex required. The Ezra group will not need any new capex for this penetration into the sub-sea market.

3) More clarity on new business direction. With the uncertainty in the AHTS market rates, we are comforted that the group has a clear roadmap to acquire new businesses. Ezra aims to have an equal split (1/3-1/3-1/3) in its revenue from offshore (mainly AHTS charters), sub-sea work and Marine construction work (mainly Vietnam yard) in 5-7 years time.

We are retaining our BUY rating and fair value of S$1.46.


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