Cosco might have to rethink its US$1.4b offshore contracts
Something is at risk.
According to CIMB, Cosco secured about US$1.4bn of offshore contracts YTD which it believes could be at the expense of its balance sheet.
Here's more from CIMB:
Net gearing in 3Q12 shot up to 1.02x. Management expects more bank borrowings as it executes more offshore projects on 20/80 payment scheme.
Net operating cashflow in 3Q12 was –S4193m and could remain negative in FY13. Valuations are still unattractive at 18x CY13 P/E vs. Singapore rig builders’ 12x.