Announcement • Jul 26
MMA Offshore to Delist Effective July 26 Cyan Renewables announced the completion of the AUD-1.1-billion (USD 726m/EUR 670m) deal to acquire MMA Offshore Limited, an Australian provider of marine and subsea services to the offshore energy and wider maritime industries. MMA in a separate statement confirmed the finalisation of the go-private deal. It added that shares in the company were suspended on July 11 and will be formally delisted on Friday, July 26, 2024. Announcement • Jul 25
Cyan Renewables Pte. Ltd. completed the acquisition of MMA Offshore Limited (ASX:MRM). Cyan Renewables Pte. Ltd. entered into a binding Scheme Implementation Deed to acquire MMA Offshore Limited (ASX:MRM) for AUD 990 million on March 24, 2024. The shareholder of MMA will receive a cash amount of AUD 2.6 per MMA share. On June 20, 2024, Cyan increased the Scheme Consideration by 10 cents per share to a total of AUD 2.7 cash per share. The Directors of MMA unanimously recommend that MMA shareholders vote in favour of the Scheme. MMA will pay a break fee of AUD 10.26 million to Cyan, in addition to circumstances where Cyan may be required to pay MMA a reverse break fee of that same amount. The transaction is conditional upon approval by MMA shareholders at the upcoming Scheme meeting, approval of the Federal Court of Australia, approval of the Australian Foreign Investment Review Board, no Material Adverse Event and Prescribed Occurrences, the independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of MMA shareholders and another customary condition regarding there being no restraining orders. The deal is expected to close on Mid-Late July 2024. As of May 27, 2024 MMA Directors unanimously recommend to vote in favor of the offer. As of July 8, 2024, the transaction has been approved by shareholders of MMA Offshore. As of July 10, 2024, the Federal Court of Australia has approved the transaction.
MMA Offshore Limited has engaged Rothschild Australia Limited as its financial adviser and Thomson Geer as its legal adviser. UBS Group AG (SWX:UBSG) is acting as financial adviser and Allens as legal adviser to Cyan Renewables Pte. Ltd. and Seraya Partners. Automic Pty Ltd. is acting as the registrar to MMA Offshore Limited. BDO Corporate Finance (WA) Pty Ltd acted as independent financial advisor to MMA Offshore Limited. Barrenjoey Capital Partners acted as financial advisor to MMA Offshore Limited, PWC acted as accountant to MMA Offshore Limited.
Cyan Renewables Pte. Ltd. completed the acquisition of MMA Offshore Limited (ASX:MRM) on July 25, 2024. New Risk • Jul 13
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 5.4% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 0.7% per year for the foreseeable future. Minor Risks Large one-off items impacting financial results. Shareholders have been diluted in the past year (5.4% increase in shares outstanding). Board Change • Jun 01
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 4 experienced directors. 1 highly experienced director. Independent Non-Executive Director Sally Langer was the last director to join the board, commencing their role in 2021. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Announcement • Mar 27
Cyan Renewables Pte. Ltd. entered into a binding Scheme Implementation Deed to acquire MMA Offshore Limited (ASX:MRM) for AUD 990 million. Cyan Renewables Pte. Ltd. entered into a binding Scheme Implementation Deed to acquire MMA Offshore Limited (ASX:MRM) for AUD 990 million on March 24, 2024. The shareholder of MMA will receive a cash amount of AUD 2.6 per MMA share. The Directors of MMA unanimously recommend that MMA shareholders vote in favour of the Scheme. MMA will pay a break fee of AUD 10.26 million to Cyan, in addition to circumstances where Cyan may be required to pay MMA a reverse break fee of that same amount. The transaction is conditional upon approval by MMA shareholders at the upcoming Scheme meeting, approval of the Federal Court of Australia, approval of the Australian Foreign Investment Review Board, no Material Adverse Event and Prescribed Occurrences, the independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of MMA shareholders and another customary condition regarding there being no restraining orders. The deal is expected to close on Mid-Late July 2024. MMA Offshore Limited has engaged Rothschild Australia Limited as its financial adviser and Thomson Geer as its legal adviser. UBS Group AG (SWX:UBSG) is acting as financial adviser and Allens as legal adviser to Cyan Renewables Pte. Ltd. and Seraya Partners. Automic Pty Ltd. is acting as the registrar to MMA Offshore Limited. Valuation Update With 7 Day Price Move • Mar 25
Investor sentiment improves as stock rises 15% After last week's 15% share price gain to AU$2.60, the stock trades at a forward P/E ratio of 12x. Average forward P/E is 11x in the Energy Services industry globally. Total returns to shareholders of 686% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at AU$3.76 per share. New Risk • Feb 23
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 6.9% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 6.9% per year for the foreseeable future. Minor Risks Large one-off items impacting financial results. Shareholders have been diluted in the past year (3.0% increase in shares outstanding). Announcement • Feb 14
MMA Offshore Limited to Report First Half, 2024 Results on Feb 22, 2024 MMA Offshore Limited announced that they will report first half, 2024 results on Feb 22, 2024 New Risk • Feb 09
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 3.0% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risks Earnings are forecast to decline by an average of 6.7% per year for the foreseeable future. High level of non-cash earnings (23% accrual ratio). Minor Risk Shareholders have been diluted in the past year (3.0% increase in shares outstanding). New Risk • Nov 30
New major risk - Revenue size The company makes less than US$1m in revenue. This is considered a major risk. Companies with a small amount of revenue are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Earnings are forecast to decline by an average of 7.0% per year for the foreseeable future. High level of non-cash earnings (23% accrual ratio). Revenue is less than US$1m. Valuation Update With 7 Day Price Move • Nov 15
Investor sentiment improves as stock rises 21% After last week's 21% share price gain to AU$1.50, the stock trades at a forward P/E ratio of 17x. Average forward P/E is 10x in the Energy Services industry globally. Total returns to shareholders of 317% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at AU$2.19 per share. New Risk • Sep 01
New major risk - Earnings quality The company has a high level of non-cash earnings. Accrual ratio: 23% This is considered a major risk. Non-cash earnings can arise from many different things. However, if a company consistently has a high level of non-cash earnings, it may be a sign that they are recognizing revenue from customers before the full value of the sales are received as cash or they are not depreciating the value of their assets appropriately. These are practices that inflate earnings, while not providing a similar increase to cash flows. Companies in some select industries naturally have a high level of non-cash earnings and it is not a major concern. However, in the worst case scenario it can be an early sign of performance manipulation by management. Currently, the following risks have been identified for the company: Major Risks Earnings are forecast to decline by an average of 77% per year for the foreseeable future. High level of non-cash earnings (23% accrual ratio). Minor Risk Shareholders have been diluted in the past year (2.2% increase in shares outstanding). Reported Earnings • Aug 29
Full year 2023 earnings released: EPS: AU$0.004 (vs AU$0.093 in FY 2022) Full year 2023 results: EPS: AU$0.004. Revenue: AU$308.3m (up 8.6% from FY 2022). Net income: AU$127.7m (up 282% from FY 2022). Profit margin: 41% (up from 12% in FY 2022). Revenue is forecast to grow 13% p.a. on average during the next 2 years, compared to a 7.6% growth forecast for the Global Energy Services industry. New Risk • Aug 25
New minor risk - Financial data availability The company's latest financial reports are more than 6 months old. Last reported fiscal period ended December 2022. This is considered a minor risk. If the company has not reported its earnings on time, it may have been delayed due to audit problems or it may be finding it difficult to reconcile its accounts. Currently, the following risks have been identified for the company: Major Risks Earnings are forecast to decline by an average of 59% per year for the foreseeable future. High level of non-cash earnings (22% accrual ratio). Minor Risks Latest financial reports are more than 6 months old (reported December 2022 fiscal period end). Shareholders have been diluted in the past year (2.2% increase in shares outstanding). Announcement • Aug 21
MMA Offshore Limited, Annual General Meeting, Nov 10, 2023 MMA Offshore Limited, Annual General Meeting, Nov 10, 2023. Announcement • Jul 17
MMA Offshore Limited to Report Fiscal Year 2023 Results on Aug 29, 2023 MMA Offshore Limited announced that they will report fiscal year 2023 results on Aug 29, 2023 Reported Earnings • Feb 24
First half 2023 earnings released: EPS: AU$0.22 (vs AU$0.015 loss in 1H 2022) First half 2023 results: EPS: AU$0.22 (up from AU$0.015 loss in 1H 2022). Revenue: AU$182.9m (up 33% from 1H 2022). Net income: AU$81.6m (up AU$87.0m from 1H 2022). Profit margin: 45% (up from net loss in 1H 2022). Revenue is forecast to grow 9.9% p.a. on average during the next 3 years, compared to a 9.8% growth forecast for the Global Energy Services industry. Over the last 3 years on average, earnings per share has increased by 109% per year but the company’s share price has fallen by 7% per year, which means it is significantly lagging earnings. Announcement • Feb 13
MMA Offshore Limited to Report First Half, 2023 Results on Feb 23, 2023 MMA Offshore Limited announced that they will report first half, 2023 results on Feb 23, 2023 Recent Insider Transactions • Sep 21
Independent Non-Executive Director recently bought AU$71k worth of stock On the 15th of September, Sue Murphy bought around 99k shares on-market at roughly AU$0.72 per share. This transaction amounted to 99% of their direct individual holding at the time of the trade. This was the largest purchase by an insider in the last 3 months. This was the only on-market transaction from insiders over the last 12 months. Reported Earnings • Aug 26
Full year 2022 earnings released: EPS: AU$0.093 (vs AU$0.009 in FY 2021) Full year 2022 results: EPS: AU$0.093 (up from AU$0.009 in FY 2021). Revenue: AU$288.8m (up 22% from FY 2021). Net income: AU$33.4m (up AU$31.0m from FY 2021). Profit margin: 12% (up from 1.0% in FY 2021). Over the next year, revenue is forecast to grow 8.7%, compared to a 20% growth forecast for the Energy Services industry in Australia. Over the last 3 years on average, earnings per share has increased by 68% per year but the company’s share price has fallen by 30% per year, which means it is significantly lagging earnings. Reported Earnings • Mar 01
First half 2022 earnings: EPS in line with expectations, revenues disappoint First half 2022 results: AU$0.015 loss per share (down from AU$0.09 profit in 1H 2021). Revenue: AU$137.3m (up 14% from 1H 2021). Net loss: AU$5.37m (down 135% from profit in 1H 2021). Revenue missed analyst estimates by 1.4%. Over the next year, revenue is forecast to grow 14%, compared to a 19% growth forecast for the industry in Australia. Over the last 3 years on average, earnings per share has increased by 35% per year but the company’s share price has fallen by 34% per year, which means it is significantly lagging earnings. Buying Opportunity • Feb 22
Now 20% undervalued Over the last 90 days, the stock is up 22%. The fair value is estimated to be AU$0.59, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 6.6% per annum over the last 3 years. The company has become profitable over the last year. Reported Earnings • Sep 02
Full year 2021 earnings released: EPS AU$0.009 (vs AU$1.04 loss in FY 2020) The company reported a decent full year result with improved earnings and profit margins, although revenues were weaker. Full year 2021 results: Revenue: AU$261.3m (down 4.3% from FY 2020). Net income: AU$2.42m (up AU$96.4m from FY 2020). Profit margin: 0.9% (up from net loss in FY 2020). The move to profitability was driven by lower expenses. Over the last 3 years on average, earnings per share has increased by 10% per year but the company’s share price has fallen by 46% per year, which means it is significantly lagging earnings. Breakeven Date Change • Jun 30
Forecast breakeven pushed back to 2023 The analyst covering MMA Offshore previously expected the company to break even in 2021. New forecast suggests losses will reduce by 71% per year to 2022. The company is expected to make a profit of AU$4.90m in 2023. Average annual earnings growth of 98% is required to achieve expected profit on schedule. Executive Departure • May 01
Independent Non-Executive Director has left the company On the 30th of April, Eva Howell's tenure as Independent Non-Executive Director ended after 9.2 years in the role. As of December 2020, Eva personally held only 115.53k shares (AU$35k worth at the time). A total of 2 executives have left over the last 12 months. Analyst Estimate Surprise Post Earnings • Feb 25
Revenue misses expectations Revenue missed analyst estimates by 0.01%. Over the next year, revenue is forecast to grow 3.1%, compared to a 1.2% growth forecast for the Energy Services industry in Australia. Reported Earnings • Feb 24
First half 2021 earnings released: EPS AU$0.09 (vs AU$0.11 loss in 1H 2020) The company reported a decent first half result with improved earnings and profit margins, although revenues were weaker. First half 2021 results: Revenue: AU$119.9m (down 8.4% from 1H 2020). Net income: AU$15.5m (up AU$25.2m from 1H 2020). Profit margin: 13% (up from net loss in 1H 2020). Over the last 3 years on average, earnings per share has increased by 14% per year but the company’s share price has fallen by 47% per year, which means it is significantly lagging earnings. Is New 90 Day High Low • Feb 19
New 90-day low: AU$0.29 The company is down 10.0% from its price of AU$0.33 on 20 November 2020. The Australian market is up 7.0% over the last 90 days, indicating the company underperformed over that time. However, it outperformed the Energy Services industry, which is down 13% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is AU$0.87 per share. Executive Departure • Feb 03
Independent Chairman of the Board Hugh Andrew Edwards has left the company On the 28th of January, Hugh Andrew Edwards' tenure as Independent Chairman of the Board ended after 11.1 years in the role. As of September 2020, Hugh Andrew personally held only 33.14k shares (AU$19k worth at the time). Hugh Andrew is the only executive to leave the company over the last 12 months.