Sembcorp Marine - OCBC Investment 2015-12-02: To post net loss in 4Q15

Sembcorp Marine - OCBC Investment 2015-12-02: To post net loss in 4Q15 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 | http://www.ocbcresearch.com/ 2015-12-02
OCBC Securities SGX Stock Analyst Report SELL Maintain SELL 2.00 Same 2.00


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