Sembcorp Marine's order book declined 38.6%

The marine and offshore engineering group is investing in three new shipyards as part of its expansion plans following a decline in its order book from S$9.0 billion FY2008 to S$5.5 billion in FY2009.

Sembcorp Marine is building a New Yard Facility at Tuas to serve as a hub for its offshore and marine engineering activities in Singapore while a new shipyard is also being built in Brazil so oil rigs can be constructed locally for that market. The group will also be building and repairing vessels in India.

Phillip Securities Research Pte Ltd meanwhile forecasts Sembcorp Marine's revenue to drop by 11.1% to S$5.1 billion and net profit to fall by 8.5% to S$640m. However, Phillip Securities Research said in a statement, "We believe that the decrease in order book will only have a short-term impact in FY2010F. This is because the company has received more enquiries on rig building and is expected to clinch more contracts this year. In fact, we anticipate Sembcorp Marine to win orders of S$2.6 billion, S$2.8 billion and S$3.1 billion for FY2010F, FY2011F and FY2012F respectively."

Added the statement, "Moreover, we expect it to be selected to build rigs for Petrobas in the tender that is due in May 2010. As a result, we project revenue to increase by 5.1% and 5.3% to S$778m and S$817m in FY2011F and FY2012F respectively. Net profit is also expected to rise by 7.6% and 10.9% to S$689m and S$764m in FY2011F and FY2012F respectively."