Sembcorp Marine's order book slipped to $13.5b in 3Q

Deliveries outpaced new orders.

According to DBS, Sembcorp Marine's order book dropped from the new record of S$14.4bn last quarter, to S$13.5bn currently, with deliveries outpacing new orders.

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While book to bill is high at 2.6x, Petrobras accounts for 48% of orders with deliveries stretching to 2019. YTD new orders of S$3.9bn are on track, accounting for 78.5% of our S$5bn assumption.

However, keen competition from Korea and China could cap margin recovery.

Seadrill, being the only first tier operator that has placed orders with Chinese yards, has awarded two more jack ups to Dalian Shipbuilding at end Jul, priced at US$230m per rig, close to Singapore yard’s pricing, although the specs could be different. In total, Seadrill has awarded ten jack ups to Dalian Shipbuilding, of which 2 will be delivered this year.