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Contrary to our initial expectation, Velesto remained in the red in 3Q21, affected by lower-than-expected JU utilisation and higher opex – we now expect a higher core loss in FY21. That said, the sub-par results this FY is well-flagged and we expect a more upbeat performance from 4Q21 onwards. It is positioned to capitalise on higher offshore O&G activities; optimising utilisation and de-gearing remain its key KPIs over next 12 months. Our TP is pegged to 1x EV/ replacement value (unchanged).

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