EXMAR - KBC Securities Company Note 22.11.2018 - FLNG ready to "Tango"
Exmar announced the signing of a long term Argentinian export project for the FLNG unit. The project does not require additional Capex and is projected for a fast-track upstart already by 2Q19. The expected EBITDA ($43m/year), combined with the FSRU barge ($23m/year) provides a potential EBITDA jump of 60% (FY18E-20E) to $130m. Additionally the unit can provide a proof of concept for new FLNG projects. Furthermore the contract unlocks the majority of the $67m restricted cash.We saw an initial very positive market reaction (+15%) that cooled down during the day (+3.9% at market close) which we find leaves a lot of value on the table. A haircut off €4.8 p.s. of the full value for both contracted vessels (FLNG and FSRU) is still being taken by the market. We increased our TP from €9.00 to €11.0 p.s. TP and reiterated our Buy Rating.Exmar is a diversified and independent industrial shipping group that serves the international oil and gas industry. Co. provides ships for products transport and performs studies, undertaking the management of commercial, technical or administrative activities. Co. specializes in gas transport activities, particularly Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG) and Ammonia (NH3). Co., through it's subsidiary EXMAR Shipmanagement, provides ship management and ancillary services to ship owners, including regasification and liquefication; other services offered by Co. include insurance brokerage (managed by its subsidiary Belgibo) and an in-house travel agency (Travel Plus).
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