PACC Offshore's profit dips 56.7% in Q2

Revenue slipped by 3.8%.

After posting a widely subscribed IPO earlier this year, PACC Offshore came in as a disappointment when its 2Q14 results fell short of analyst expectations.

According to a report by OCBC, PACC Offshore’s profit after tax and minority interest dipped 56.7% year on year to US$11.9m.

“Looking ahead, although there has been a delay in commencement of work for its POSH Xanadu SSAV and a delay in delivery for its POSH Arcadia SSAV, we believe POSH will be able to secure a contract for the latter in the coming months. We lower our fair value estimate from S$1.40 to S$1.21 (still pegged to 11x FY15F EPS) after paring our PATMI projections. However, we believe a buying opportunity exists following POSH’s recent sharp share price correction,” noted OCBC.

Here’s more from OCBC:
Management updated us that the commencement of work for its POSH Xanadu semi-submersible accommodation vessel (SSAV) has now been  delayed from Dec this year to latest end-Jan 2015.

This is because its customer Petrobras has required modifications to be made to the vessel. Delivery of its second SSAV POSH Arcadia has also been delayed from 4Q14 to Jan 2015.

Although it has yet to be contracted, we understand that POSH is now in various stages of tendering for jobs
in Gulf of Mexico, Brazil, West Africa and North Sea. Encouragingly, POSH’s discussions with Petrobras has revealed that the latter has additional requirements for three SSAVs in 2015.

Hence, we believe POSH stands a good chance of securing a second contract with Petrobras in the coming months.