Production in the September quarter was down -1% because of the mooring damage. The company has revised 2019 guidance, reducing production volumes by -5%. Unit production costs are up 9%, driven by lower production volumes and higher repair costs.
Credit Suisse reduces 2019 capital expenditure estimates by -US$110m and adds this amount to FY20 estimates. The broker reduces the target to $6.05 from $6.25 and maintains an Underperform rating.
Upside is envisaged if PNG expansion plays out on schedule but risks remain skewed to the downside, in the broker’s view.
Target price is $6.05.Current Price is $7.03. Difference: ($0.98) – (brackets indicate current price is over target). If OSH meets the Credit Suisse target it will return approximately -16% (excluding dividends, fees and charges – negative figures indicate an expected loss).