PGS (Hold, TP: NOK8.50) - Negative underlying FCF
Q1 EBITDA was below expectations, on higher costs. While cash conversion appeared exceptionally strong, we believe it was driven by non-recurring items, leaving underlying cash flow much weaker than headline figures suggest. We forecast negative underlying FCF in 2024, adjusting for arbitration proceeds received in Q1. Expecting soft vessel utilisation in Q2 as well, due to steaming and yard stays, we have reduced our 2024e EBITDA by 7%. We reiterate our HOLD, but have cut our target price to NOK8.5 (8.8).Petroleum Geo-Services is engaged in providing geophysical services and oil and gas production services. As of Dec. 31, 2001, Co. operated six Ramform design vessels in its marine seismic data acquisition operations.
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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