Sembcorp Marine pops the champagne on $13.6b orderbook

Deliveries are extending up to 2019.

According to Nomura, Sembcorp Marine reported 1Q13 PATMI of SGD119mn, up 5% on y-y basis though significantly lower than consensus of SGD158mn on sales of SGD1.05bn (up 11.4% y-y).

Higher profitability vs. 1Q12 was largely attributable to strong EBIT margins at 13.7% during the quarter (12.2% in 1Q12) which offset the strong decline in associate income and lower interest income.

Here's more from Nomura:

Results were down sharply vs. 4Q12 though, with revenue coming in 23% lower while PATMI at SGD119mn was down 28.7% q-q. The sharpest decline in revenue was registered in the rig building segment (-31% q-q) followed by conversion and offshore (-12%).

EBIT margins, though, recovered strongly to 13.7% during the quarter (10.8% in 4Q12) as general and administrative expenses declined 37% q-q.

Management has maintained its positive outlook on the sector, citing strong enquiry levels across business divisions and healthy fundamentals for the offshore & marine sector driven by the projected rise in offshore exploration and production spend.

Given strong competition for new orders, the group will focus on improving productivity and operational efficiency and ensuring timely and within-budget delivery of orders to clients.

According to management, demand for ship repair and upgrade work too remains high. The group has a strong orderbook of SGD13.6bn with deliveries extending to 2019 while new orders secured during the quarter amounted to SGD1.7bn.

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