Sembcorp Marine - OCBC Investment 2020-04-23: Challenging Outlook

SEMBCORP MARINE LTD (SGX:S51) | SGinvestors.io SEMBCORP MARINE LTD (SGX:S51)

Sembcorp Marine - Challenging Outlook

  • Hit by oil price plunge.
  • Thinning order book.
  • Waiting for news on any restructuring.



Hit by oil price plunge



Chances of being placed on watch-list

  • Recall that Sembcorp Marine (SGX:S51)’s FY19 net loss to S$137m, which was wider than previously expected. The group also saw net loss of S$74m in FY18. According to SGX’s listing manual, should a company record pre-tax losses for the three most recently completed consecutive financial years, and its average daily market cap is less than S$40m over the last six months, it would be placed on a watch-list.
  • Currently, Sembcorp Marine’s market cap is way higher than S$40m, but the group has given notice of three consecutive years of pre-tax losses. Indeed, this trend of losses is likely to continue.
  • As mentioned in our earlier report, we are expecting 2020 to continue to see losses for the group. Overall business volume remains low, and looking ahead this is likely to continue for all segments expect for repairs and upgrades (underpinned by IMO regulations that require installation of ballast water treatment systems and gas scrubbers).
  • Challenges remain, in particular supply chain disruptions due to the COVID-19 virus outbreak, which could affect execution of projects. Competition remains intense for all business segments.


Thinning order book






Low Pei Han CFA OCBC Investment Research | https://www.iocbc.com/ 2020-04-23
SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.75 DOWN 1.230



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