Company Name: CH OFFSHORE LTD
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 0.44 |
DBS Vickers downgraded marine service provider CH Offshore to ’hold’ from ’buy’ and cut its target price to $0.44 from $0.50, citing greater earnings risk as its high-value charters expire.
By 10:17 a.m., shares of CH Offshore were 1.2% lower at $0.415, and have gained 18.6% since the start of the year, compared to Thomson Reuters Asia Pacific and Russia Energy Index’s 4.8% fall.
Two of CH Offshore’s charters to Latin America, which accounted for 54% of its 2011 gross profit, have concluded their four-year terms and will not be extended, DBS said.
Although, the brokerage said, the anchor handling tug and supply vessels charter market had bottomed out and is recovering, current day rates are only 60-80% of previous peak levels.
As a result, DBS cut its 2013 profit forecast for CH Offshore by 22%.
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