• Global values Maridive stock at US$4.5/share and recommends a ‘BUY’ on the stock
Global Investment House – Egypt – Maridive & Oil Services – Initial Coverage – Maridive & Oil Services was established in 1978, as an Egyptian joint stock Company, headquartered in Port Said. On April 2008, Maridive stock was offered in an Initial Public Offering (IPO), where Maridive stock started trading as of May 5th, 2008 on the Egyptian Exchange (EGX).
Maridive offers a wide range of services to the oil and gas exploration and production (E&P) companies, both the offshore construction services (OCS) and the offshore supply vessels (OSV), including platform construction, maintenance, salvaging, rig transportation and positioning, as well as the supply of drilling materials. Maridive provides the entire services required during the process of oil and gas exploration, drilling, production and maintenance.
We initiate our coverage on Maridive & Oil Services Company with a "BUY" recommendation. Based on the combination of Discounted Cash Flow Method and Relative Valuation Method, we have valued the Company’s shares at a fair value of US$4.5 per share, with an upside potential of 73.0%, compared to the current market price of US$2.6 per share, as of March 24th, 2009.
Financial Performance
Maridive’s sound track record and high quality services, for over than 30 years in the offshore services, has supported the Company’s presence around the globe. Catering to Maridive’s well-built brand name and sound operational record, coupled with strong technical capabilities, the Company’s financial performance has exhibited steady and firm progress since its establishment in 1978. Maridive’s top line reported a healthy growth at a CAGR of 22.7% over the period from 2005 to 2008. Total revenues amounted to US$257.1mn in 2008, compared to US$139.3mn in 2005. This growth in revenues can be primary attributed to the higher charged vessels daily rates, along with the expansion witnessed in Maridive’s operating vessels.
Maridive’s sources of revenues are classified into two major segments. The Offshore Construction Services (OCS) segment constitutes the bulk of the Company’s total revenue, accounting for 82% in 2007, down from 85% in 2006. This can be attributed to the decline in OCS’s operating barges, where a pipe-lay barge sunk in June 2007. During 2008, the OCS segment contribution fell again to 71% of total revenues, due to the sale of a jack-up barge in June 2008.
