Fred Olsen Energy (Sell, TP: NOK3.00) - Cash EBITDA in negative territory
Q4 EBITDA of USD10m was below our estimate and consensus due to lower revenue and higher operating costs. Adjusting for accounting of the termination fee, we estimate cash EBITDA of USD-16m. Despite securing more work (60 days) for Blackford, the combination of an old fleet, lack of backlog and not enough cash flow to cover interest payments means the upcoming restructuring could marginalise current equity.Fred Olsen Energy is engaged in offshore drilling as well as engineering and fabrication services. Co. provides services and operates within the two segments; offshore drilling and engineering and fabrication. The Offshore Drilling segment provides services to the offshore oil and gas industry. The Engineering and Fabrication segment provides engineering, fabrication, ship building and repair services for various offshore and onshore industries.
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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