Opinion change, from Buy to Add (Dietswell)
OPINION CHANGECHANGE IN OPINIONAdd vs Buy
CHANGE IN TARGET PRICE€ 1.38 vs 1.86 -25.6%
Following the H1 update, we have lowered our estimates for oil & gas activities and now see FY20 revenues of €4.8m vs €5.3m previously and FY21 revenues of €5.3m vs €7.3m previously. While the newsflow is undoubtedly positive in renewables, the current retreat in drilling activities impacts our valuation.
CHANGE IN EPS2020 : € -0.23 vs -0.32 ns
2021 : € -0.16 vs -0.05 ns
2020 is down due to the revision in the Audit & Inspection division (Factorig) with revenues at €2.6m vs €3.5m previously. 2021 is down due to revision in the Audit & Inspection division (Factorig) with revenues at €3m vs €3.7m previously as well as in the New Energies division (Dolfines New Energies) as we shift the commercialisation of the floater from 2021 to 2022. The lower estimates at Factorig is justified by our cautious stance on the recovery of investments in oil & gas.
Note that, as we shift the commercialisation of the floater by one year, we have also delayed the issuance of €4m of debt from 2020 to 2021. This therefore reduces the interest expenses and impacts positively the EPS for 2020 (despite our negative revision in oil & gas).
CHANGE IN NAV€ 2.50 vs 2.90 -13.9%
The NAV is down on higher net debt (as a result of the lower estimates for FY20), as well as a lower valuation of the Factorig division (down by 10% to €6m) which is justified by the lower estimates for the division in 2020 and 2021.
CHANGE IN DCF€ 2.25 vs 2.76 -18.2%
The DCF is down on our lower estimates for 2020 and 2021 in oil & gas activities.
Dietswell. Dietswell SA is a France-based company that provides drilling operation management services for the oil industry. The Company specializes in the design, drilling, work-over and completion engineering. It offers well engineering services, such as well engineering, preparation and evaluation of tenders, offset wells reviews; drilling project management, management of the stock of spare parts, supply of communications and logistic support, among others; drilling contracting; rig design and contracting, which designs, constructs and refurbish rigs; rig inspection and audits, which provide customized inspection and audit services; and provision of technical assistance. Dietswell SA principally provides its services to ageing oilfields that need updating, or that need to be decommissioned in an environmentally friendly manner. The Company holds stakes in two companies: Dolfines Logistique and Feumag Holding Company Limited. In October 2013, it announced the creation of Dietswell Brazil.
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