“No turnaround in sight.” That was the conclusion of DBS Bank summing up the outlook for Singapore offshore services firm Ezra Holdings in a research note which sent Ezra Holdings shares tumbling over 8% on the Singapore Exchange today.
The bank downgraded Ezra to full value at 6 cents, highlighting the negative headwinds affecting its subsea and OSV businesses, with the subsea JV – EMAS-Chiyoda Subsea – operating below breakeven, and a stunningly bad fleet utilisation at barely 50%.
Ominously the report continues: “While Ezra has secured waivers for technical covenant breaches, the focus will remain on keeping afloat.”
Ezra stocks are trading half a cent down at 5.4 cents on the back of the report, compounding the negativity surrounding the company which last week saw banks taking a majority share in subsidiary Triyards as collateral. Ezra Holdings handed a 30.46% stake in Triyards to DBS Bank and a 30.46% stake to OCBC Bank in a share charge arrangement.
Ezra has been reporting consecutive losses, and in January this year RHB Research said in a note that Ezra’s shares were trading at a price to book value which indicates that the market expectation for the group is bankruptcy.