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Seadrill Warns of 'Likely' Bankruptcy Filing in U.S. or U.K.
Offshore drilling services company Seadrill Ltd. said Tuesday it is planning a comprehensive debt restructuring that will likely include a bankruptcy filing in the U.S. or the U.K.
Offshore drilling services company Seadrill Ltd. said Tuesday it is planning a comprehensive debt restructuring that will likely include a bankruptcy filing in the U.S. or the U.K.
Oil up
Mermaid up
What happen? Why dumping these days?oil rebound, hopefully it starts to pump up!
TanSiBeiKu ( Date: 07-Mar-2017 18:45) Posted:
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How's the mermaid? Hope it didn't drown in the red Sea today
not sure but for me this is just the beginning though. some players already out earlier before 0.20 as they versted since 0.10x.
Goodiessss ( Date: 21-Mar-2017 15:34) Posted:
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At what price would you recommend selling? 😊
Lai Liao? :)
No idea trying to figure out why
RedEye1811 ( Date: 17-Mar-2017 17:10) Posted:
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Big jump today in afternoon...is it sign final move toward going private?
Another potential candidate to delist ?
* 22.33% Float
* Price / Book Value --> 0.606
* NAV --> $0.34
Safety in balance sheet strength
Maintain BUY as Mermaid looks set to remain profitable
through the crisis. Balance sheet risks have mostly dissipated for
Mermaid Maritime (Mermaid) following the cancellation late last
year of newbuild contracts for three vessels (two tender rigs and
one dive support vessel), which would have otherwise entailed
US$379m in remaining capex commitments. Balance sheet has
moved to net cash position as at end-FY16 as Mermaid
generated US$49m positive operating cash flow in FY16. With a
healthy operating profit improvement from subsea business in
FY16 on the back of cost reductions and renewals of contracts
for all three jack-up rigs under associate AOD III coming through
in FY16, earnings visibility has improved and the stock continues
to offer a more favourable risk-reward profile amid industry
peers. Chances of privatisation by parent Thoresen Thai and its
associated promoter group provides further upside potential.
FY16 profits were slightly above expectations on cost savings.
Mermaid&rsquo s core net profit of US$17.1m was slightly above our
estimates due to better than expected cost savings and higher
than expected associate income in 4Q16. Taking this into
account, we revised up our net profit forecasts for FY17F/18F to
US$7.9m/ US$9.6m from US$1.7m/ US$4.4m earlier. The drop
in profit in FY17F compared to FY16 is due to the drop in
associate contributions owing to revision of day rates for the rig
contract renewals but sustained profitability puts Mermaid in an
enviable position compared to peers in the oil services space.
Valuation:
Given the healthy balance sheet situation, we maintain our
P/BV peg at 0.7x &ndash slightly below our peg for PACC Offshore,
our top pick amongst SGX-listed OSV operators - and adjust
our TP to S$0.25, representing a c.25% upside at current
prices. Our 2-stage DCF (9.2% WACC terminal growth 1%)
valuation, used as a cross-check measure, also supports this.
Key Risks to Our View:
Failure to refinance the bank debt at associate AOD level in the
next few months could lead to some uncertainty.
At A Glance
Issued Capital (m shrs) 1,413
Mkt. Cap (S$m/US$m) 283 / 202
Major Shareholders (%)
Thoresen Thai Agencies PCL 58.2
Mahagitsiri Chalermchai 10.7
Mahagitsiri Prayudh 8.4
Free Float (%) 22.7
3m Avg. Daily Val (US$m) 1.0
Mermaid Maritime
4Q16 : Starting FY17 with a stronger balance sheet
FY16 core net profit (US$18.3m) formed 91% of our forecast due ■ to slightly weaker
revenue and GP margins. It met consensus estimate.
■ Despite the slight miss, it is undeniable that MMT has posted a significant earnings
turnaround on the back of stringent cost rationalisations.
■ Financially flexible from healthy balance sheet and no impending vessel deliveries.
■ Maintain Add with a higher target price of S$0.28, based on FY17 P/BV of 0.77x
(10% above its historical 5-year average).
4Q16 skewed by lower revenue and weaker GP margins
MMT&rsquo s 4Q16 core net profit of US$2.7m was below our US$3.8m forecast largely due to
revenue and EBIT margins, which came in at US$44.2m and 5.6% respectively (vs. our
forecasted US$48.9m and 11.0%). 4Q16 core net profit excluded a US$4m provision
booked in SG& A for cancelled vessels which we consider as one-off, and a tax credit of
US$2.1m. Overall, 4Q16 was a large improvement over 4Q15&rsquo s core loss of US$16.2m.
An applaudable FY16 due to cost rationalisations
MMT posted a significant turnaround in FY16 with a full-year core net profit of US$18.3m
(vs. FY15 core net profit of US$3.7m). Revenue fell 45% to US$185.2m (vs. FY15:
US$336.6m) on the back of day rate cuts and lack of cable-lay contracts, while
associate earnings also fell 43.3% due to rate cuts from its Saudi Aramco contracts. But
these were all mitigated by MMT&rsquo s tireless efforts to optimise its costs, via cold stacking
exercises, reduction in marine crew & dive tech expenses and SG& A.
Low likelihood of further impairments
Unlike its peers, MMT did not report any impairments in 4Q16, as it had already taken
impairments of US$163m for own assets and US$70.7m for AOD rigs post an extensive
exercise in 2015. Moving ahead, we believe there is low possibility of further
impairments unless the sector takes a turn for the worse again.
Outlook
Management guided that there is still some time-lag in subsea opportunities and that it is
still focused on cash preservation and cost management. MMT enters FY17 with an
order book of US$170.6m and long-term contracts for its AOD rigs (3-year contracts till
Jun/Dec-19). We note that its four major vessels recorded an average utilisation of 72%
in 4Q16 (vs. 4Q15&rsquo s 48%). Management guides Mermaid Commander could see lower
utilisation in 1H17 and hopes to improve that via the bidding season in Feb-Mar 17.
Healthy balance sheet = financial flexibility
MMT turned net cash as at end-16, and has resolved its loan covenant breach (which
saw long-term (LT) loans being reclassified as short-term (ST) in 2016). It also finalised
the cancellation of the newbuilds it had committed to pre-2016. In terms of debt
repayments, the majority of its US$89.5m LT loans will mature after four years or more.
It reported a positive operational cashflow of US$49.0m in FY16.
Maintain Add
We trim our FY17/18F EPS by 6.7/5.9% on lower revenue assumptions (-7.7%/-6.8%).
We also introduce FY19 forecasts. We maintain Add but with a higher TP of S$0.28 (vs.
S$0.24) on a FY17F P/BV of 0.77x (0.65x prev.). We believe MMT warrants c.10%
premium to its historical 5-year mean of 0.7x, given its balance sheet strength, minimal
downside risk (low impairment and blow-up risks), and its position to capitalise on any
asset acquisition opportunities ahead. Key risk is weaker utilisation and DCRs.
What has happened to mermaid ? Sleeping
Must keep it' s momentum today towards 0.30.
CAN see VIKING also!!
Run Run to 0.25. Huat ahhhhhhhh
Go Go Go ... Still holding my 0.147-0.15 ... 2017 year really a good Beginning.
strange price movenment. Looks like something is brewing behind... another take over case like vard in the making? Quite possible.
big block at 20 and 205..if break likely go 22 but looking tough
Trading halt?