DNO (Buy, TP: NOK13.10) - Soft underlying Q3 results
Q3 adj. EBITDA was 47% below consensus and our forecast. Q3 cash flow from operations (working capital adjusted) was 48% below our estimate. DNO recognised a non-cash accounting gain of USD556m related to the earlier announced Tawke receivable settlement. The 2017 capex guidance was unchanged at USD130m and the company gave positive comments on Peshkabir-3 production. We expect a negative share price reaction today (0–3%) due to lower than forecast Q3 results. No presentation/conference call is scheduled.DNO is a Norwegian exploration and production company focused on the Middle East and North Africa. Co. holds stakes in oil and gas blocks in various stages of exploration, development and production, both onshore and offshore, in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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