The clock is ticking: Sembcorp on the rush to deliver projects

Its first Sete Brasil drillship is running late.

SMM registered a seasonally stronger 2H with marginally higher profits due to the conclusion of higher orders, but is experiencing crunch time with several projects still to meet their deadlines.

In a report, Maybank says that the first Sete Brasil drillship was supposed to be in Brazil after the World Cup but is now expected to reach Brazil at the end of October.

Meanwhile, the construction of SMM’s Jurong Aracruz yard in Brazil is on track, with initial operations to start in 2H14 and full completion in 2015. Also, ship repair revenue was flat despite higher capacity from its Tuas integrated yard. More vessels were repaired, but average revenue per vessel fell on a weaker shipping market.

Here’s more from Maybank:

SMM expects more FPSO orders but sees near-term weakness for other product types, consistent with our view. It remains optimistic on the longer term, citing strong enquiries from customers. YTD new orders of SGD2.5b formed 57% of our full-year forecast. Net orderbook was SGD12.7b.

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