CSE Global’s FY15 profit to dip by 5%: report

Customers’ budget cuts will trickle down to maintenance expenses.

CSE Global might be looking at a 5% dip in FY15 profit, according to a report by OCBC. If low oil prices further sustain, any budget cuts by the company’s customers will likely reach the maintenance-related costs in later stages.

The report also noted that greenfield projects will probably see more pullback.

Apart from this, OCBC notes that CSE’s exposure to brownfield maintenance jobs means that the company’s earnings will generally remain resilient.

“Although 80% of CSE’s revenue is driven by O&G customers, most if not all of its recurring brownfield maintenance projects are related to the production and pipelines stages instead of the exploration and development phase (first to face capex and budget cuts),” said the report.