Sembcorp Marine - CGS-CIMB Research 2022-06-29: More Reprieve For Balance Sheet To Come

Sembcorp Marine - More Reprieve For Balance Sheet To Come

  • Sembcorp Marine (SGX:S51) successfully delivered drillship Deepwater Atlas for Transocean to be chartered to Beacon Offshore on the Shenandoah project in the US Gulf of Mexico, scheduled to begin in 3Q22. With this, Sembcorp Marine will receive US$50m of delivery payment and the remaining US$370m will be paid over 5 years from delivery. We expect little help for Sembcorp Marine’s cashflow with the US$50m from Transocean.
  • Sembcorp Marine's net gearing as of 1Q22 stood at 0.38x.
  • The second drillship, Deepwater Titan, could be delivered by 2H22 with delivery payment of US$350m and US$90m to be spread over 5 years from delivery. Assuming no further delays, we expect the final payment for Titan to have a positive impact on Sembcorp Marine’s cashflow.
  • We gather that order momentum and narrowing losses could be re-rating catalysts for Sembcorp Marine rather than strength in the balance sheet given the already low net gearing position.
  • Reiterate HOLD rating on Sembcorp Marine with target price of S$0.09 based on 0.8x FY22F P/BV (3-year historical average).

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

LIM Siew Khee CGS-CIMB Research | Izabella TAN CGS-CIMB Research | 2022-06-29
SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.090 SAME 0.090

Previous report by CGS-CIMB:
2022-06-14 Sembcorp Marine - Defence Contract Confirmed

Check out the most recent target prices at Sembcorp Marine Target Prices. Listing of analyst research reports at Sembcorp Marine Analyst Report.

Relevant links:
Sembcorp Marine Share Price History,
Sembcorp Marine Announcements,
Sembcorp Marine Dividends & Corp Actions,
Sembcorp Marine News Articles


SGX Stock / REIT Search