As opposed to consensus, assuming declining EBITDA margins. Addressing key investor concerns of higher borrowing costs, lower utilization rates and debt servicing. Lowering TP by 24%.
Lowering our utilisation rates on new spot orders We have reduced our utilisation rates on Aban’s spot fleet to 89% due to shorter nature of the contracts, while keeping utilisation rates for the contracted fleet unchanged. This results in our EBITDA margins declining from 68%-58% over FY09-FY12 to 68%-55% over the same period. Our revision of utilisation rates addresses investor concerns on possible decline in jack-up demand which is also supported by the fact that majority of the jack-up contracts globally within the last three-four months have been short term in nature.
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