Sembcorp Marine - CIMB Research 2015-10-23: Short-term pain, long-term gain unsure
SEMBCORP MARINE LTD S51.SI Sembcorp Marine - Short-term pain, long-term gain unsure
- 3Q15 core net profit of S$49m was 50%/60% below our/consensus forecast due to weak rig-building revenue recognition and reversal of profit for five jack-up rigs.
- Plunge in the share price of associate Cosco resulted in S$17m impairment made on assets held for sale as well as S$24m losses shared in associates.
- 3Q15 EBIT margin was 6.6% (1H15: 11.4%) due to profits reversed for five jack-up rigs which had stopped construction since Aug 15.
- We cut our FY15-16 EPS by 2-12% and target price to S$2.03, as we roll forward to CY17 valuation, still based on 11x P/E (-1 s.d. of historical average).
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