Ann: Appendix 4D and Interim Financial Report , page-3

I had a look at the interim ann (not report) late last night and was shocked by the figures. NPAT up 44% (excellent) yet EPS only 3.8cents! I was expecting (see post 28/01) 6.5-7c. I couldn't fathom how i could be so far out with estimate. Today, i've read the full report and fortunately not as bad as orig thought, but def not as good as had forecast.

The ann compares 1H14 with PCP. But 1H13 was very different from 2H13. And that's where the discrepancy is. In September i calc FY14 EPS of 12.7c (MS 12.3c). Saw yesterday MS had reduced their est to 10.5c for full yr 14. What happened?

I based my estimates on 2H13 anticipating SXE surge into LNG space would continue to deliver the goods. Esp after their ann to JV with LNG specialist KS. They subsequently have won work but not to the extent i hoped.

2H13 Rev 157.4m vs 1H13 Rev 110.7m
EBITA 21.7M vs 12.3m
NPAT 13.0m vs 6.2m
EPS 7.9c vs 3.8c

Hence i expected earnings to slow but not to this extent. But good news is that SXE have 30m is ST receivables so really need to compare full yr with full yr for figures to pan out. SXE remain optimistic re 2H but don't give an est eps. The order book is comparable with prev yrs and margins remain ok. They gallantly concede their disappointment re missing a big Wheatstone contract they obviously expected to get. That's the nature of contract game. So what to expect in 2h14? i'm punting that 5.9-6.1c is achievable making 9.7-9.9c for the yr. Using mid est with SP at 84c=PE of 8.57. In my shock last night i placed order to sell 40% of my holding at 83c which i had bought for 73.5c on 24/01/14. So what to do now I've got better understanding of result? Looking at macro, CA, margins, high cash level, company outlook etc... am comfortable to hold balance in portfolio for time being. Clime's IV of 98c is currently 'under review'. Probably won't change too drastically.

What do others reckon?