Magseis Fairfield (Buy, TP: NOK12.00) - Worse than we feared
We had been concerned that Magseis Fairfield would be a turnaround case, with new management the first step needed, but the current situation appears worse than we expected. While we see continued risk to our 2020 forecasts, including underlying margins and ability to right size the cost base, we have cut our 2020e EBITDA by 36%, to USD61m, equal to an EV/EBITDA of 2.3x. We reiterate our BUY although we expect the turnaround to be lengthy, but have cut our target price to NOK12 (18) on revised estimates.Magseis Fairfield ASA, formerly Magseis ASA, is a Norway-based company engaged in geophysical surveying and mapping. The Company specializes in Ocean Bottom Seismic (OBS) acquisition services dedicated to the oil and gas industry. The Company's Marine Autonomous Seismic System (MASS) consists of the in-sea cable and sensor capsules, automated handling and data download. Together with a range of miniaturized Fairfield Z-nodes, it enables operations in water depths to 3000 meters. The Company divides its operations into six regions, namely Barents Sea (Norway), Malaysia, Singapore, the Red Sea, United Kingdom and Sweden. It has offices in Norway, Sweden, the United Kingdom, Brazil, Singapore and the United States.
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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