SembCorp Marine' s stock rose to close at at 8.5 cents, a two month high, last Friday.

 

SINGAPORE - SembCorp Marine (SCM) said it is positioned for growth and recovery as overall new order visibility across all business segments have improved, although it expects losses to continue in the second half of the financial year.

 

In a third-quarter business update released late last week, SCM noted that following the completion of its $1.5 billion rights issue in September, it now enjoys an " enhanced" liquidity position with a strengthened balance sheet and has sufficient funding until at least end-2022.

 

Meanwhile, the company continues to work on its projects in the energy sector, spanning both traditional and renewable segments.

 

Projects that were successfully delivered include the integration of offshore vessel Vito' s topside with its hull at SCM' s flagship Tuas Boulevard Yard, LNG vessel refits for various customers, and naval repairs for vessels of the Singapore and United States navies.

 

On the renewable energy front, the company said its wind farm projects were going well, with new order flow potential in sight.

 

" The group continues to focus on the safe and timely execution of its existing order book as at end 3Q 2021 of over $1.42 billion, including $0.18 billion of ongoing repairs and upgrades for delivery in 2022," it said.

 

" Of the group' s 16 projects under execution, two are scheduled for completion in FY2021 and another 12 in FY2022. The remaining two will progressively be completed by 2025."

 

Still, the company expects significant losses to continue in the second half of 2021, due to a severe supply chain crunch and acute manpower shortage resulting from the Covid-19 pandemic. But it added that it was " positioned for recovery underpinned by ongoing strategic diversification and expansion into the clean energy sector" .

 

As for its financials, SCM said that following the rights issue, it has repaid a $430 million loan facility.

 

" The group continues to work with external consultants to develop a holistic performance improvement plan to further drive operational improvements and optimise its cost structure," it added.

 

As at end-September, the group' s net debt to equity stands at 0.4 times.

 

SCM' s stock rose to close at 8.5 cents, a two-month high, last Friday.

 

UOB Kay Hian put out a " buy" on the counter last week, citing improving outlook.

 

" While the company continues to guide for a poor 2H21, this should not be news to the market," said UOB Kay Hian in a report.

 

The brokerage noted that SCM' s third-quarter update showed " a number of positives" .

 

Meanwhile, Temasek Holdings has increased its stake in SCM to 54.6 per cent after triggering a mandatory general offer, portending a potential merger with Keppel Group' s financially stronger offshore and marine division.