OB:REACH

Stock Analysis Report

Executive Summary

Reach Subsea ASA provides subsea services in Norway.

Snowflake

Fundamentals

Excellent balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Reach Subsea's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: REACH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-7.1%

REACH

0.7%

NO Energy Services

-1.1%

NO Market


1 Year Return

-38.7%

REACH

-22.1%

NO Energy Services

-3.9%

NO Market

Return vs Industry: REACH underperformed the Norwegian Energy Services industry which returned -22.1% over the past year.

Return vs Market: REACH underperformed the Norwegian Market which returned -3.9% over the past year.


Shareholder returns

REACHIndustryMarket
7 Day-7.1%0.7%-1.1%
30 Day-7.9%0.7%1.3%
90 Day-23.0%11.8%7.1%
1 Year-36.5%-38.7%-20.6%-22.1%1.2%-3.9%
3 Year-13.1%-16.0%8.8%0.6%40.5%22.9%
5 Year-49.4%-51.1%-31.7%-53.0%54.1%19.0%

Price Volatility Vs. Market

How volatile is Reach Subsea's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Reach Subsea undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: REACH (NOK1.57) is trading below our estimate of fair value (NOK85.33)

Significantly Below Fair Value: REACH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: REACH is unprofitable, so we can't compare its PE Ratio to the Energy Services industry average.

PE vs Market: REACH is unprofitable, so we can't compare its PE Ratio to the Norwegian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate REACH's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: REACH is overvalued based on its PB Ratio (1.2x) compared to the NO Energy Services industry average (0.6x).


Next Steps

Future Growth

How is Reach Subsea forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

42.3%

Forecasted Energy industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Reach Subsea has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Reach Subsea performed over the past 5 years?

-47.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: REACH has large one-off items impacting its financial results.

Growing Profit Margin: REACH's current net profit margins (-2%) are higher than last year (-3.8%).


Past Earnings Growth Analysis

Earnings Trend: REACH is unprofitable, and losses have increased over the past 5 years at a rate of -47.1% per year.

Accelerating Growth: Unable to compare REACH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: REACH is unprofitable, making it difficult to compare its past year earnings growth to the Energy Services industry (14%).


Return on Equity

High ROE: REACH has a negative Return on Equity (-6.56%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Reach Subsea's financial position?


Financial Position Analysis

Short Term Liabilities: REACH's short term assets (NOK218.5M) do not cover its short term liabilities (NOK274.8M)

Long Term Liabilities: REACH's short term assets (NOK218.5M) exceeds its long term liabilities (122.4M)


Debt to Equity History and Analysis

Debt Level: REACH's debt to equity ratio (10.7%) is considered satisfactory.

Reducing Debt: REACH's debt to equity ratio has reduced from 13.5% to 10.7% over the past 5 years.


Balance Sheet

Inventory Level: REACH has a high level of physical assets or inventory.

Debt Coverage by Assets: REACH's debt is covered by short term assets (assets are 10.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable REACH has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: REACH is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 118.9% per year.


Next Steps

Dividend

What is Reach Subsea's current dividend yield, its reliability and sustainability?

4.46%

Current Dividend Yield


Dividend Yield vs Market

company4.5%marketbottom25%2.5%markettop25%6.0%industryaverage4.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: REACH's dividend (4.46%) is higher than the bottom 25% of dividend payers in the Norwegian market (2.5%).

High Dividend: REACH's dividend (4.46%) is low compared to the top 25% of dividend payers in the Norwegian market (5.99%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether REACH's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if REACH's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: REACH is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Reach Subsea's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Jostein Alendal 0

5yrs

Tenure

kr1,592,000

Compensation

Mr. Jostein Alendal has been the Chief Executive Officer of Reach Subsea ASA since November 2014 and serves as its Managing Director. Mr. Alendal served as Business Development Manager at Reach Subsea ASA. ...


CEO Compensation Analysis

Compensation vs Market: Jostein's total compensation ($USD175.27K) is below average for companies of similar size in the Norwegian market ($USD350.44K).

Compensation vs Earnings: Jostein's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.2yrs

Average Tenure

Experienced Management: REACH's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

68yo

Average Age

Experienced Board: REACH's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sellkr4,155,84620 Feb 19
Anders Onarheim
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,755,743
Max Pricekr2.37
Sellkr1,934,03420 Feb 19
Rachid Bendriss
EntityIndividual
Shares817,082
Max Pricekr2.37
Sellkr96,100,25720 Feb 19
North Energy ASA
EntityCompany
Shares40,600,000
Max Pricekr2.37
Buykr105,071,56220 Feb 19
North Energy ASA
EntityCompany
Shares44,390,156
Max Pricekr2.37
Buykr117,50003 Dec 18
Anders Onarheim
EntityIndividual
Role
Member of the Board of Directors
Director
Shares50,000
Max Pricekr2.35

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Øyvind Johannessen

    Head of Technical Ship Management Side

    • Tenure: 0yrs
  • Solveig Byrkjeland (59yo)

    VP of Finance & Company Secretary

    • Tenure: 0yrs
  • Rune Lande (59yo)

    Secretary of the Board

    • Tenure: 5yrs
    • Compensation: kr250.00k
  • Sven Storesund

    Asset Manager

    • Tenure: 2.8yrs
  • Inge Grutle

    Chief Operating Officer

    • Tenure: 3.2yrs
    • Compensation: kr1.14m
  • Jostein Alendal

    CEO & MD

    • Tenure: 5yrs
    • Compensation: kr1.59m
  • Birgitte Johansen

    CFO & HR Manager

    • Tenure: 0yrs
    • Compensation: kr1.14m
  • Bård Høgheim

    Chief Commercial Officer

    • Tenure: 2.7yrs

Board Members

  • Anders Onarheim (60yo)

    Director

    • Tenure: 7yrs
  • Kåre Lie (73yo)

    Chairman of the Board

    • Tenure: 5yrs
  • Sverre Mikkelsen (68yo)

    Director

    • Tenure: 7yrs
  • Kristine Skeie

    Director

    • Tenure: 1.5yrs
  • Ingunn Iveland

    Director

    • Tenure: 0.8yrs

Company Information

Reach Subsea ASA's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Reach Subsea ASA
  • Ticker: REACH
  • Exchange: OB
  • Founded: 2008
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: kr225.367m
  • Shares outstanding: 143.55m
  • Website: https://www.reachsubsea.no

Number of Employees


Location

  • Reach Subsea ASA
  • Garpeskjærveien 2
  • Haugesund
  • Rogaland
  • 5527
  • Norway

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
REACHOB (Oslo Bors)YesOrdinary SharesNONOKJan 1992
0EMBLSE (London Stock Exchange)YesOrdinary SharesGBNOKJan 1992

Biography

Reach Subsea ASA provides subsea services in Norway. The company offers inspection, maintenance, and repair services; and remotely operated vehicles, survey, and construction services. It provides engineer ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/17 20:41
End of Day Share Price2019/11/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.