Ezra +2.5%; AMC start of exciting chapter - DMG

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED
Research House: DMG

Ezra (5DN.SG) is +2.5% at $1.66 recovering earlier losses as investors and analysts cheer the company’s announcements that it has completed the purchase of AMC and that its deepwater subsea services arm EMAS AMC won a US$41 million ($52.1 million) contract from Norway’s Statoil (STO.OS) to lay power cables in the North Sea. 

DMG, which has a Buy rating and $2.40 target, says the AMC buy marks “the beginning of a new exciting chapter” as AMC brings much needed subsea umbilicals, risers & flowlines/Engineering, Procurement, Installation & Construction expertise; post acquisition DMG estimates that Aker Solutions (AKSO.OS) will own around 8.4% of Ezra. 

“We see FY11 as a transition year for Ezra to integrate AMC and build the backlog orders and FY12 is the year where earnings are set to show strong growth due to higher deployment of assets,” it says. 

It adds, with the delivery of the newbuild multi-purpose subsea construction vessel, Aker Connector, start-2012, “EMAS AMC has the capacity to generate annual revenue of over US$1 billion.”