Sembcorp Marine’s order book to hit $1.95bn with delivery of two drill ships

The drill ships were built for Transocean.

Sembcorp Marine’s order book can hit $1.95b year-to-date (YTD) following the delivery of its two drill ships built for Transocean, according to CGSCIMB.

YTD order wins can also be around $800m-$915m, added CGSCIMB.

From the first drillship, Deepwater Atlas, SMM will receive US$50m ($69.55m) of delivery payment, and the remaining US$370m to be paid over five years from delivery.

For  Deepwater Titan, SMM will receive a payment of US$350m ($486.76m) and US$90m ($125.17m), also to be paid over five years from delivery. 

Deepwater Titan will be delivered by 2H22. 

Assuming there will be no delays in the delivery of Titan, CGSCIMB said the final payment for Titan will have a “positive impact on SMM’s cash flow.”

The analyst, however, warned that “order momentum and narrowing losses could be re-rating catalysts rather than strength in the balance sheet given the already low net gearing position.”