The subsea division contributed 62 percent of Ezra’s revenue in financial year 2013, which ended August 31. The unit reported a 44 percent year-one-year rise in revenue in 2013, but made a $23 million operating loss as it struggled with higher-than-expected costs and delay in certain projects, Ezra’s financial reports showed.
“The fundamentals of the subsea industry are positive resulting in strong prospects for our subsea business in areas such as North America and Europe,” Lionel Lee, group chief executive officer and the company’s top shareholder, said in a statement.
Shares in Ezra jumped more than 40 percent over the past six months amid talks of a possible sale or merger of the subsea division. The company announced in early December that it was in discussions about its subsea unit following a query from the Singapore Exchange.
Ezra shares fell nearly 2 pct at S$1.26 by 0223 GMT.
“There is a lot of scepticism in the market,” said Clement Chen, a Barclays analyst.
“The only reason the share price performed the way it did in the second half of last year was speculation on M&A. Now the company says it is considering listing, some of the M&A premium may be withering down.”
Barclays has an underweight rating on Ezra, with a target price set at S$0.90.
Subsea services providers install infrastructure on the bottom of ocean for the increasingly complex offshore oil and gas fields. (Reporting by Rachel Armstrong and Rujun Shen; Editing by Miral Fahmy)
(c) 2014 Thomson Reuters, All Rights Reserved