SembMarine's order pipeline could hit $3b in 2019

One major deal is a floating production storage and offloading (FPSO) contract that could be worth up to $2.76b (US$2b).

Although order wins have been behind expectations in m2019 amidst project delays in final investment decisions (FIDs), Sembcorp Marine’s (SMM) strong order pipeline could secure $3b or more worth of new orders in 2019, DBS Equity Research said. The research firm is also positive on SMM’s offshore capital expenditure (capex) recovery ahead.

Amongst these contracts may include a Gravifloat modularised liquefied natural gas (LNG) which could go around $1b, two large Compressed Gas Liquid carriers for SeaOne Caribbean valued at $800m in total, and Rosebank’s floating production storage and offloading (FPSO) contract that could be worth up to $2.76b (US$2b).

The firm has so far clinched around $1b of new orders YTD.

Also read: Sembcorp Marine sank into a $29.76m loss in Q3

Other upside risk could come from privatisation or merger & acquisition (M&A) activities, as well as the write-back of provisions from successful deliveries or vessel sales, DBS Equity Research said.

Meanwhile, key downside risks include continued sinking of oil prices which would affect rig count and new building activities, execution risks in new product types.

SMM experiecned its net profits sink further to $29.76m in Q3 amidst loss upon the sale of a semi-submersible and continued low overall business volume which impacted the absorption of overhead costs.

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