Must stay above this 5.00 level or more downside possible. Note that this 5.00 support was broken in Aug last year which saw this counter hit a low of 3.05 in Oct. Might find a new support at 4.50.
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621-640 of 3003
Tuesday, May 8, 2012
SEMB MAR CHART - Broke the 5.00 critical support yesterday on weak market sentiment. Currently at 4.89.
Must stay above this 5.00 level or more downside possible. Note that this 5.00 support was broken in Aug last year which saw this counter hit a low of 3.05 in Oct. Might find a new support at 4.50.
Some analysts call for $4.20 ... ...
SembMarine off 5.5% Profit, outlook disappoint: OSK-DMG
Tags: Sembcorp Marine | Sembcorp Industries | SembMarine
Tags: Sembcorp Marine | Sembcorp Industries | SembMarine
| Written by Dow Jones & Co, Inc | |||||
| Tuesday, 06 November 2012 10:31 | |||||
SembMarine drops 5.5% to $4.43 in a sharp knee-jerk reaction to its 3Q12 net profit dropping 48.1% on-year to $115.5 million on lower revenue recognition from rig-building projects, coming in below several analysts’ forecasts. “It’s not just the earnings. It’s probably the outlook as well,” says Jason Saw, an analyst at OSK-DMG. “It’s not as strong as I expected,” he says. “Margins actually for the current quarter were in line, but the forward guidance was weaker than I expected as well,” he says. “I don’t see any catalyst.” Orderbook quotes suggest the $4.33 intraday low, the lowest since June 8, likely won’t be retested. Volume is strong, accounting for about 4.3% of shares changing hands on the SGX. Parent Sembcorp is down 3.5% at $5.19 SembMarine accounted for more than 50% of Sembcorp’s FY11 net profit. |
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Published November 06, 2012
Sembcorp Marine sinks after sharp Q3 profit fall
Sembcorp shares hit as low as S$4.33 on Tuesday, the weakest level since June 12 -PHOTO: SEMBCORP MARINE
SINGAPORE - Shares of Sembcorp Marine Ltd plunged as much as 7.7 per cent after the company reported a 48 per cent fall in its third-quarter net profit mainly due to lower revenue recognition for its rig building projects.
Sembcorp reported a net profit of S$115.5 million (US$94.3 million) for its third quarter ended September, down from S$222.5 million a year earlier. Revenue for the quarter fell 31.5 per cent to S$892.4 million.
Sembcorp shares hit as low as S$4.33 on Tuesday, the weakest level since June 12. Nearly 13 million shares changed hands, 3.4 times the average full-day volume over the past 30 days.
" Sembcorp Marine is seeing strong market fundamentals and is hoping to add more work to its existing order book by end of the year. However, intense competition from shipyard with excess capacity in Korea and China are putting pressure on margins," DMG & Partners Securities said in a report.
Sembcorp Marine reports lower profits
NOVEMBER 5, 2012 — Sembcorp Marine's order backlog is at a record high of Singapore $12.1 billion. However, in the first nine months of this year, the Group's net profit was S$371 million— 29 percent down on the S$523 million net for the same period in 2011. On a quarterly basis, the third quarter of 2012 net profit was S$116 million on the back of lower turnover at S$892 million, attributable mainly to lower revenue and margin recognition. Overall, Group turnover for the first nine months of 2012 was S$3,052 million, 3 percent higher as compared with S$2,963 million for the same period in 2011.
FINANCIAL HIGHLIGHTS
For the rig building sector, turnover in the third quarter of 2012 at S$428 million was 52 percent lower as compared with S$884 million in 2011.
The period saw one jack-up rig, the third jack-up from Noble, achieve initial percentage of completion revenue recognition as compared with 2011 which saw the resumption of revenue recognition for one semi-submersible unit, the Songa Eclipse, upon its completion and delivery in the third quarter of 2011. On a nine month basis, turnover at S$1,486 million in 2012 was 7 percent lower as compared with the same period in 2011.
The ship conversion/offshore sector in the third quarter of 2012 registered a 29 percent increase in turnover to S$300 million as compared with S$232 million for the same period in 2011. The sector saw one project, the conversion of FSO Banyu Urip, achieving major revenue recognition with six other projects in varying stages of construction and five units in the planning stage. On a 9M 2012 basis, turnover was 26 percent higher at S$1,065 million as compared with S$847 million in 2011.
For the ship repair sector, turnover in the third quarter of 2012 was S$153 million, 13 percent lower as compared with S$175 million for the corresponding period in 2011, attributable to timing of ship repair projects. For the first nine months of 2012, turnover was S$474 million as compared with S$485 million for same period in 2011.
Group operating profit in the third quarter of 2012 at S$126 million was 40 percent lower as compared with S$211 million for the same period in 2011. The third quarter of 2012 witnessed one unit of jack-up rig achieve initial recognition as compared with the same period in 2011 which saw the resumption of revenue and margin recognition of a semi-submersible rig, the Songa Eclipse, upon its completion and delivery in the third quarter of 2011. At 9M 2012, operating profit was S$406 million versus S$536 million in 2011.
On a pre-tax level, Group profit at S$139 million in the third quarter of 2012 was 49 percent lower as compared with S$275 million for the same period in 2011. For the first nine months of 2012, it was S$467 million as compared with S$637 million in 2011.
Earnings per share for the Group were 17.81 cents with return on equity at 21.1 percent.
OUTLOOK
The Group has secured contract orders worth a total of S$9.1 billion since the start of the year, growing the Group’s net order book from S$5.1 billion as at end 2011 to a record high of S$12.1 billion, with completion and deliveries extending till 2019. The Group remains focused on operational efficiency, productivity improvements and the timely deliveries of these record orders to our customers.
The global economy remains fragile and uncertain. Offshore exploration and production (E& P) spending continues to remain buoyant with discoveries in frontier areas and around the primary deepwater basins of the U.S. Gulf of Mexico, Brazil, East and West Africa and Nigeria.
Although the market environment for shipping remains challenging, says Sembcorp Marine, there is continued demand for repair and life extension work for LNG carriers as well as repair and upgrading work for cruise ships and offshore vessels. Demand for the Group’s big docks remains strong with the yards’ Alliance/FCC and longterm customers providing a stable base-load.
Overall, enquiries continue to be healthy, although competition remains keen and affects margin.
NOVEMBER 5, 2012 — Sembcorp Marine's order backlog is at a record high of Singapore $12.1 billion. However, in the first nine months of this year, the Group's net profit was S$371 million— 29 percent down on the S$523 million net for the same period in 2011. On a quarterly basis, the third quarter of 2012 net profit was S$116 million on the back of lower turnover at S$892 million, attributable mainly to lower revenue and margin recognition. Overall, Group turnover for the first nine months of 2012 was S$3,052 million, 3 percent higher as compared with S$2,963 million for the same period in 2011.
FINANCIAL HIGHLIGHTS
For the rig building sector, turnover in the third quarter of 2012 at S$428 million was 52 percent lower as compared with S$884 million in 2011.
The period saw one jack-up rig, the third jack-up from Noble, achieve initial percentage of completion revenue recognition as compared with 2011 which saw the resumption of revenue recognition for one semi-submersible unit, the Songa Eclipse, upon its completion and delivery in the third quarter of 2011. On a nine month basis, turnover at S$1,486 million in 2012 was 7 percent lower as compared with the same period in 2011.
The ship conversion/offshore sector in the third quarter of 2012 registered a 29 percent increase in turnover to S$300 million as compared with S$232 million for the same period in 2011. The sector saw one project, the conversion of FSO Banyu Urip, achieving major revenue recognition with six other projects in varying stages of construction and five units in the planning stage. On a 9M 2012 basis, turnover was 26 percent higher at S$1,065 million as compared with S$847 million in 2011.
For the ship repair sector, turnover in the third quarter of 2012 was S$153 million, 13 percent lower as compared with S$175 million for the corresponding period in 2011, attributable to timing of ship repair projects. For the first nine months of 2012, turnover was S$474 million as compared with S$485 million for same period in 2011.
Group operating profit in the third quarter of 2012 at S$126 million was 40 percent lower as compared with S$211 million for the same period in 2011. The third quarter of 2012 witnessed one unit of jack-up rig achieve initial recognition as compared with the same period in 2011 which saw the resumption of revenue and margin recognition of a semi-submersible rig, the Songa Eclipse, upon its completion and delivery in the third quarter of 2011. At 9M 2012, operating profit was S$406 million versus S$536 million in 2011.
On a pre-tax level, Group profit at S$139 million in the third quarter of 2012 was 49 percent lower as compared with S$275 million for the same period in 2011. For the first nine months of 2012, it was S$467 million as compared with S$637 million in 2011.
Earnings per share for the Group were 17.81 cents with return on equity at 21.1 percent.
OUTLOOK
The Group has secured contract orders worth a total of S$9.1 billion since the start of the year, growing the Group’s net order book from S$5.1 billion as at end 2011 to a record high of S$12.1 billion, with completion and deliveries extending till 2019. The Group remains focused on operational efficiency, productivity improvements and the timely deliveries of these record orders to our customers.
The global economy remains fragile and uncertain. Offshore exploration and production (E& P) spending continues to remain buoyant with discoveries in frontier areas and around the primary deepwater basins of the U.S. Gulf of Mexico, Brazil, East and West Africa and Nigeria.
Although the market environment for shipping remains challenging, says Sembcorp Marine, there is continued demand for repair and life extension work for LNG carriers as well as repair and upgrading work for cruise ships and offshore vessels. Demand for the Group’s big docks remains strong with the yards’ Alliance/FCC and longterm customers providing a stable base-load.
Overall, enquiries continue to be healthy, although competition remains keen and affects margin.
This graph shows Sembcorp Marine's net order book
Three jack-up rigs will be delivered in 4Q12.
According to OCBC, on a sequential basis, net profit fell 19% we were expecting a pick up as more projects achieve initial revenue recognition stage.
Here's more from OCBC:
However, 3Q12 only saw one jack-up rig achieve initial revenue recognition. The operating margin of 14.1% in 3Q12, though higher than 2Q12’s 13.1%, was also lower than our 15% assumption. Meanwhile we sense management’s more conservative stance towards margin guidance.
That said, we expect 4Q12 to be a better quarter as the first drillship is scheduled to achieve initial revenue recognition, albeit with lower margins. Three jack-up rigs will also be delivered in 4Q12 vs one in 3Q12.
The offshores were mostly trading flat yesterday.
Kepcorp was seen to be rebounding very strongly after a week of bearish movement. This rebound has formed a lower low formation and Kepcorp is likely to head towards 11.00 resistance level to test it. Sembmar was trading at its support of 4.66 level without any clear signs of rebound.
Last evening, Sembmar announced a drop in profit for the 3rd quarter and this could impact upon Sembmar today. 4.66 support level might fail to hold and if the market reacts bearishly, it will slide towards 4.52 support or in the worse case, 4.33 support level.
Sembcorp is also struggling to find its support and if bearishness is seen in Sembmar, Sembcorp might also be affected by the sentiment. Immediate support for Sembcorp is at 5.20 level where the 200ma support line is.
Overall
, the offshores could be a bearish target of the market currently due to the weak earnings reported by Sembmar.