Sembcorp Marine amasses a total of $1.95b FPSO projects in 2H14

On top of $1.93b wins in jack-up rigs and drillships in 1H14.

SembMarine has won its fourth FPSO order this year, combining it with an offshore substation platform contract for a total value of SGD222m.

According to a report by OSK-DMG, Sembcorp Marine’s (SembMarine) YTD wins of SGD3.9bn include SGD1.93bn in jack-up rigs and drillships won in 1H14, and SGD1.95bn of floating, production, storage and offloading (FPSO) conversions and other offshore production assets won in 2H14.

Here’s more from OSK-DMG:

The shift towards production units in 2H14 is interesting. It also confirms our view that, while drilling operators may adopt a wait-and-see approach on how the new supply in the market will affect day and utilisation rates before placing new orders, SembMarine can still win a healthy quantum of contracts from projects at the development stage.

SembMarine’s core earnings peaked in FY10 at SGD817m and troughed in FY12 at SGD541m. For operating margins, the peak was in FY10 (20.7%) while the bottom was in 3Q13 (10.1%). The latest 2Q14 operating margin was reported at 11.5% and, after adjustment for the exceptional SDG11.4m forex loss, the core margin was actually a fairly robust 12.3%. We expect higher revenue recognitions from projects in hand with healthier margins in 2H14 to drive stronger quarterly results going forward.