Sembcorp Marine - UOB Kay Hian 2023-03-01: FY22 Losses As Expected, But The Focus Is On A Brighter Future

• Sembcorp Marine reported losses that were slightly higher than our and consensus’ estimates. However, free cash flow of over S$1b for 2022 and a much stronger balance sheet put the company in a strong position for 2023, in our view.
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• We believe market attention will be on its new order wins and the integration of Keppel Offshore Marine (KOM). in the near to medium term.

Sembcorp Marine reported losses for 2022 as expected.

• Sembcorp Marine (SGX:S51) reported a 5% y-o-y increase in 2022 revenue to S$1.95b and a loss of S$261m which the company had previously guided for. See Sembcorp Marine's announcement dated 27 Feb 2023. The 2 key positives from the result were:
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  2. a major narrowing of losses at the bottom line to S$261m in 2022 vs S$1.17b loss in 2021.
• Free cash flow in 2022 was S$1.01b vs 2021’s free cash outflow of S$545m, demonstrating the large amount of cash inflow due to the completion of 12 key projects during the year.

A much stronger balance sheet that will stand Sembcorp Marine in good stead in 2023.

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Above is the excerpt from report by UOB Kay Hian Research.
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