PVD - Victim of oil price plunge - Earnings Flash
PVD’s FY16 revenue and NPAT-MI dropped 63.6% and 92.9% vs FY15, respectively. This was due to the sharp fall in day rates and job volume. PVD’s IR expects another challenging year in 2017 despite the recent oil price recovery. We may keep our M-PF rating in the next update report.The slump in day rates and utilization rates dampened drilling service revenues and in turn, operating profit. Drilling revenue plummeted 67.7% vs FY15, caused by (1) FY16 jack-up rig (JU) average day rates dropped 36.