The interim numbers were in line with the January update (Drilling EBITDA $16.2m), however outlook commentary was more muted. SWK anticipates some rig movements this half which, together with the cessation of higher short-term rates at sites where longer-term rates are currently being renegotiated, will result in earnings weaker than 1H19. We downgrade to SPEC BUY (prior BUY) on a lower valuation of $0.34 (prior $0.40) until the extent of the near term utilisation issues become clearer.
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