The group recorded a net loss of $583m for FY2020.
The recovery of marine and offshore engineering group Sembcorp Marine (SembMarine) is still a long way off amidst a challenging environment in the industry, according to OCBC Investment Research (OIR).
SembMarine recorded a 47.6% drop in revenue to $1.5b and a net loss of $583m for FY2020 mainly due to lower revenue recognition from rigs and floaters, repairs and upgrades, and specialised shipbuilding projects, which was mitigated by higher revenue recognition from offshore platforms.
OIR’s research team also said that the outlook remains challenging amidst relatively low oil prices. Further risks involve higher-than-expected capex requirements, risks relating to Brazil, and lower-than-expected new order flows.
“We continue to see multiple headwinds on low order book clarity and capex requirements. There remains the potential for impairments ahead, and while the financial position is less precarious following the rights issue, it is still tight and could limit the types of orders that the group can pursue,” the research team added.
OIR maintained its “hold” rating for SembMarine with a fair value of $0.145.
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