OCBC cuts Swiber target to $0.56 vs $0.88

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.56

OCBC Investment Research has cut its target price for Singapore oil and gas services firm Swiber Holdings (SWBR.SI) to $0.56 from $0.88 and kept its hold rating.

OCBC said Swiber's second-quarter, first-half core net profit of US$5.3 million ($6.4 million) after stripping away one-off items such as a gain on asset disposals and fair value gains was lower than expected, mainly due to a fall in its gross margin to 14.7% from 22.1% a year ago.

Swiber said its second-quarter net profit fell 11.6% to US$12.6 million from US$14.3 million a year ago.

However, OCBC noted that Swiber was actively bidding for overseas projects, especially in Southeast Asia, India and the Middle East. 

The company is eyeing potential projects worth about US$3.6 billion in Southeast Asia, the brokerage said.

At 10:44 a.m., shares of Swiber were 4% higher at $0.525, and have fallen about 48% since the start of the year.