DNO (Hold, TP: NOK7.50) - Soft across the board
Q2 EBITDA of USD122m was well below consensus of USD167m but in line with our USD125m. The miss was due to lower equity production and higher costs, partly offset by the reversal of SG&A costs. We expect delayed spending in Kurdistan in 2021e to reduce 2022e production. As the 2021 production guidance was below expectations, we see 2021 consensus EPS down 15–20% and 2022e EPS down 10–15% on the report; we expect the stock to underperform today.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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