Saturday, October 07, 2006

Stock Upgraded: Labroy Marine with price target of 2.5 by DBS Vickers

DBS Vickers Securities has raised its target price for Labroy Marine Ltd to 2.50 sgd from 2.40 as it expects stronger earnings after the company secured new contracts from Norway's Standard Drilling ASA. Labroy said Standard Drilling has exercised its option to order the third and fourth jack-up rig at a contract value of 153.5 mln usd each, which is a 5 pct premium to the first two job orders. "We expect margins for these two contracts to be higher given higher contract price and economies of scale as it overcomes the initial learning curve," DBS Vickers said in a note. Consequently, the brokerage increased its net profit forecasts for 2007 and 2008 by 15 pct to 119.2 mln sgd and 19 pct to 140.9 mln, respectively. It kept its 2006 forecast at 69.2 mln sgd. Labroy reported net profit of 54.6 mln sgd for 2005. "Potential catalyst for re-rating will come from new jack-up orders from offshore drilling operators," said DBS Vickers which has a "buy" call on the stock. At 9.34 am, Labroy was up 0.02 sgd or 1.07 pct at 1.89 on volume of 2.33 mln shares.

0 Comments:

Post a Comment

<< Home