Thursday, January 13, 2011

Ezra Holdings - Jan 13

Ezra Holdings reports decline in net profit

SINGAPORE: Mainboard-listed Ezra Holdings, a services and vessels provider to the offshore oil industry, reported a 28 per cent decline in its net profit for the first quarter, ended Nov 30, of the financial year 2011.

The company's income statement showed a net profit of US$13.3 million (S$17.2 million), down from US$18.5 million in the year-ago quarter.

The lower net profit was due to financial expenses which surged 180 per cent to US$5.5 million and profits from associated and joint venture companies which fell 97 per cent and 90 per cent to US$149 million and US$196 million, respectively.

However, group revenue rose 25 per cent to about US$76 million and operating profit increased by 40 per cent to US$18.2 million.

Ezra said revenues were mainly driven by its deepwater subsea services arm.

Ezra also announced winning of fresh charters worth a total of about US$73 million for three of its offshore support vessels, including two of its recently added multi-purpose platform supply vessels.

Its managing director Lionel Lee said the fixtures reflect the strong and growing demand for offshore support vessels as development and production activities pick up.

Source: Channelnewsasia



Looking at Ezra Holdings, I must admit I was sorely disappointed at her results, although still quietly upbeat/optimistic about her future prospects (especially since it won some contracts recently).

Looking at her technicals, Ezra Holdings, the stock price has moved out the overbought region. Furthermore, Ezra Holdings closed at 1.79 today and a large bearish black candlestick was seen, accompanied by high selling volume. MacD has crossed below the signal line. Nonetheless, we can see support at 200dma at 1.79 and support at 20dma at 1.78, and I expect them to be tested tomorrow. Besides those two support, a stronger support is seen at 50dma and 100dma at 1.74. I am still undecided on whether to keep or sell as I dont think the super strong resistance of 1.85 would likely be broken in the near future.

However, I would like to state that despite my short-term bearish view on Ezra Holdings, I am still long-term bullish on this counter and other companies involved in the offshore and marine industry. The fundamentals of Ezra Holdings is sound and strong.

Quote from previous post on STX OSV: "Finally, I am still long-term bullish on this counter. STX OSV is involved in the oil and gas industry and in particular the building of drillships to extract oil from deepwater. I believe that much growth could be seen in this sector as oil prices would likely rise in the future, due to strong demand from BRIC and other developing countries. And as the industrial saying "the easy oil has been extracted" goes...it is likely that the oil we drill in the future would come from deepwaters... and firms like STX OSV would likely benefit heavily from this future development. "

Lastly, I am also haunted of the painful lesson learnt of not taking profit/cut loss fast as exemplified by Wilmar after she announced her terrible results in November last year. I guess I will be contemplating deeply in bed tonight whether to take profit or not tomorrow.

P.S. Update on STX OSV: STX OSV rose strongly recently after my profit-taking...perhaps I have taken profit too early? I guess so. Another lesson learnt on volume analysis: what constitute strong selling volume? apparently the selling pressure experience by STX OSV was not strong enough to warrant a profit taking...

2 comments:

  1. Hi ming,

    maybe you can try CFD if you're short term bearish but long term bullish. It's like an insurance policy, you pay to get insurance on your shareholdings for the short term. So what you lose from your underlying stock, you gain by shorting the stock from CFD, in the end you don't lose even though share price drops.

    cheers

    ReplyDelete
  2. Hi issac

    Yeah I could try CFD, but from what I understand, CFD happen to be highly leveraged products...

    Also, I think I am not familiar and "mature" enough to start using leveraged products like CFD, options, futures etc... but may consider doing so in the future.

    Cheers
    ming

    P.S. Thanks for the suggestion and for visiting my blog! :)

    ReplyDelete