Sembcorp Marine's ship repair revenue to hit $1.2b by 2015

Thanks to its new yard capacity.

According to CIMB, given the new Tuas yard capacity, it forecasts that Sembcorp Marine's  ship repair revenue will increase by about 50% from S$642m in FY12 to S$980m in FY14 and almost double to S$1.2bn in FY15. We also expect earnings upside from offshore and conversion projects (such as the FPSO conversion and fixed platform by SMOE), thanks to the expanded capacity. Currently, all fixed platform jobs secured by SMOE are executed in Sembawang (on about 27ha of land).

CIMB also noted that the incremental depreciation for the new yard is about S$20m-30m or 3% of SMM’s FY14 EPS but we expect this to be easily offset by the increase in ship repair revenue.