Epic Gas: Business Combination With Lauritzen Kosan Might Adjust The Picture
Epic Gas posts its 4Q20 report next Wednesday. Following somewhat declining rates and having in mind winter holidays and the pandemic, we expect results on the weaker side. We have not included the potential business combination with Lauritzen Kosan anyhow in our model until it is official and more details are announced, which were planned in 1Q21. Until then, we reiterate Buy recommendation for the stock at an unchanged NOK 19/sh Target Price.
Somewhat weaker quarter expected
There were some signs of weakness during the quarter – the rates for pressurized LPG vessels declined, expenses should build up following not only the pandemic, but also oil price gradually increasing, which continued into 2021. Therefore, we anticipate USD 8.8m in EBITDA and a negative bottom line to be reported in 4Q20, while our estimates for FY2021 were also cut.