SEMBCORP MARINE LTD
S51.SI
Sembcorp Marine: To post net loss in 4Q15
- Sembcorp Marine (SMM) issued a profit warning last evening, saying it expects to report a net loss for 4Q15 and a significant decline in net profit for FY15. In the statement, SMM attributed this to the challenging operating environment and customers deferring or seeking to defer their rig orders.
- We believe this could be partly due to a profit reversal from the jack-up rig in dispute with Marco Polo Marine; there has also been talk that Seadrill may be reevaluating its US$568m semi-submersible rig (West Rigel) which it ordered in Apr 2012.
- With this profit warning, we should see earnings revisions across the street.
- Though the stock has corrected significantly and is close to our original fair value of S$2.00, we maintain our SELL rating as we put our fair value estimate under review, pending a downward revision in our estimates.
- SMM will announce its FY15 results on 15 Feb 2016.
Low Pei Han
OCBC Securities
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http://www.ocbcresearch.com/
2015-12-02
OCBC Securities
SGX Stock
Analyst Report
2.00
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2.00
