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Wednesday, 1 November 2017

Sembcorp Marine (S51.SI)


2/11/2017

metrics
  • last done $2.00
  • market cap sgd 4.2b
  • pe 51.12, pb 1.67, nav 1.206
  • total debt to equity 162.18%, current ratio 1.34
relative valuation
  • keppel corp pb 1.17
  • sembcorp ind pb 0.88
  • sembcorp marine 1.67
operations
  • 2 main segments
    • rigs & floaters, repairs & upgrades, offshore platforms and specialised shipbuilding
    • ship chartering
  • Rigs and floaters remained the largest segment, accounting for 40% of total revenue followed by offshore platforms at 36%, repair and upgrades at 20% and others at 4%
 summary
  1. Successfully sold nine Pacific Class 400 jack-up drilling rigs to Borr Drilling, sold for about US$1.3 billion, to improve liquidity position. with current ratio at 1.34, liquidity should not be a problem in the meantime
    1. interest expenses to decline as debt is reduced
  2. We believe provisions of $329 million made in FY2015 for the Sete Brasil contracts remain adequate under present circumstances
  3. With deliveries till 2020, our net order book currently stands at $7.97 billion. Excluding Sete Brasil projects, net order book totals $4.85 billion
  4. Good progress has been made in the development and commercialisation of our Gravifloat technology for near-shore gas infrastructure solutions
risks
  • execution risks from existing order book and future orders
  • unforeseen impairment risks
  • oil price decline
at
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