Seatrium (formerly known as SembMarine)

[winston]

not vested. Down 6.6%

Singapore oil rig builder Sembcorp Marine said its third-quarter net profit fell 48 percent to S$115.5 million from a year earlier.

Its net order book stood at S$12.1 billion.


Source: Reuters

[winston]

Recovery postponed to 2014

NEUTRAL - Downgrade
Share Price S$4.69
Tgt. S$5.01

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Although 3Q12 could be partially masked by a pick-up in 4Q12, the lower margin guidance of 10-13% in 2013, due to learning curve effects for new designs and conservative provision for the Brazilian contracts, could spark earnings cuts and share price downtrend in the near-term.

9M12 net profit came in below expectations at 60% of our and consensus FY12 forecasts from lower-than-expected revenue.

Still, we expect a stronger 4Q12 as more projects will reach initial recognition, including the first drillship.

We cut our FY12-14 EPS by 6-17%, on lower margins.

Downgrade to Neutral, largely on the earnings cut.

Our lower target price on a roll over to CY14 is based on mid-cycle O&M valuations of 15x P/E (from 18x).

Source: CIMB

[winston]

not vested

STOCKS NEWS SINGAPORE-Sembcorp Marine sinks after sharp Q3 profit fall

Shares of Sembcorp Marine Ltd plunged as much as 7.7 percent after the company reported a 48 percent fall in its third-quarter net profit mainly due to lower revenue recognition for its rig building projects.

Sembcorp reported a net profit of S$115.5 million ($94.3 million) for its third quarter ended September, down from S$222.5 million a year earlier. Revenue for the quarter fell 31.5 percent to S$892.4 million.

Sembcorp shares hit as low as S$4.33 on Tuesday, the weakest level since June 12. Nearly 13 million shares changed hands, 3.4 times the average full-day volume over the past 30 days.

"Sembcorp Marine is seeing strong market fundamentals and is hoping to add more work to its existing order book by end of the year.

However, intense competition from shipyard with excess capacity in Korea and China are putting pressure on margins," DMG & Partners Securities said in a report.

The broker cut its target price to S$4.61 from S$5.70, citing lower earnings and rising competition for Sembcorp's shipyard operations.


Source: Reuters

[winston]

not vested

SembCorp Marine’s 3Q12 PATMI fell 48% y-o-y to S$116m, below expectations due to slower-than-expected drawdown of order book on new projects.

Our analyst cuts FY12/13F earnings by 14%/10% respectively as he
1) adjusts order book recognition schedule,
2) lowers EBIT margins by 0.7ppts/1ppt and
3) trims FY12 order win by S$0.5bn.

4Q12 should be the best quarter for the year, on expectations of higher margins and sales. However, we believe margins could remain under pressure as new rig designs are affected by impact of learning curve in the initial ramp up phase.

Lower TP to $5.34 from $5.85, Maintain Buy.

Source: DBS

[winston]

not vested

Lumpy revenue led to volatile earnings
• 3Q12 below on slow orderbook drawdown
• Lower EBIT margins of 10-13% next year
• FY12/13F cut by 15%/13%
• Maintain BUY, TP trimmed to S$5.20


Maintain BUY, TP trimmed to S$5.20. Our SOTP-based TP is trimmed to S$5.20, with its core businesses pegged to 16x FY13 PE (unchanged).

While the stock could come under near term pressure due to earnings cut on lower margin guidance, SMM remains a prime beneficiary of the current upcycle for demand of deepwater, harsh environment rigs.

With a net orderbook of S$12.1bn, buoyed by record FY12 YTD order wins of S$9.1bn, revenue visibility is strong. However, we believe margins could be under pressure in the range of 10% to 13% as new rig designs are affected by the impact of learning curve in the initial ramp up phase.

On a brighter note, higher shiprepair sales from capacity expansion at the new Tuas yard will raise the overall blended margins for the group in the long run.

http://www.remisiers.org/cms_images/res ... 2_buy_.pdf

[winston]

not vested

STOCKS NEWS SINGAPORE-Citi cuts Sembcorp Marine target price

Citigroup cut its target price on rigbuilder Sembcorp Marine Ltd to S$5.40 from S$6.10 and kept its 'buy' rating, citing smaller revenue recognition and lower margin assumptions.

By 0259 GMT, Sembcorp Marine shares were flat at S$4.39 and have risen 15 percent since the start of the year, compared with the Straits Times Index's <.FTSTI> 13.4 percent gain.

Citi cut its 2012-2013 earnings per share estimates for Sembcorp Marine by 4-11 percent, but raised its 2014 estimates by 6 percent to account for higher repair contributions and drillship sales.

The brokerage expects Sembcorp Marine's earnings to bottom this year and see a strong rebound in 2013-2014, adding that it was "upbeat on the exploration and production cycle and believe it will continue into 2013, underpinned by demand for broad mix of products."


Source: Reuters

[winston]

Order win outlook remains good.

Net orderbook currently stands at SGD13.6b with SGD900m in new contracts secured YTD.

Order win outlook is still good, coming from replacement rig demand and higher spec rigs.

We expect new contract wins of SGD5.2b per year for FY13F and FY14F.

We remain positive on long-term prospects.

Maintain Buy.

Source: Kim Eng

http://www.remisiers.org/cms_images/res ... 202131.pdf

[winston]

not vested

“Long Term” would have to be tagged on to a BUY call, which can still be justified by the solid record order books, now $13.6 bln. ($11 bln worth secured in 2012 and $900 mln in the year-to-date.)

2012 has been disappointing, marked by declining margins due to a variety reasons, resulting in net profit falling 27% in Q4 to $167 mln, and 28% for the full year to $752 mln.

For instance, building drillships, new to SMM, but traditionally a stronghold of the Korean yards, has affected overall margins.

Provision for the recent accident also played a prt for the disappointing Q4.

Coupled with higher capex on new yards, in Tuas Singapore (Phase 1 ready in H2 ’13) and Brazil (2014
completion), and the record order books (some cash has to be set aside), and dividend has been
compromised, the special slashed from last year’s 14 cents to only 2 cents.

With 5 cents interim and the just declared final 6 cents, yield is a pedestrian 2.7%.

Source: Lim & Tan

[behappyalways]

Sembcorp Marine to build world's largest semi-sub crane vessel in US$1 billion contract
http://sgx.i3investor.com/servlets/fdnews/52354.jsp

[behappyalways]

SembMarine struggles to stay afloat as cash-strapped customers defer rig orders
http://sbr.com.sg/energy-offshore/news/ ... rig-orders