04 August 2014

Sembcorp Marine Quarterly Report Media Release - August 2014

My Notes

Sembcorp Marine is one of the counters in my watch list. It is one of the largest rig builders in Singapore besides Keppel Corp. I believe it is still having some competitive advantages against competitors in other countries such as China although they are playing a catch up game now. 

Some of the key risk here:
  • learning curve in Brazil operation, as the company brings in technology and "know-how" to the locals there, there might be additional cost involved for the local workers to learn the skills there. 
  • Slow down in E&P activities may affect the new order momentum for new rigs. Nonetheless, as long as the crude oil price maintains at more than US$90, it is still reasonable for the companies to look for new crude oil sources in deeper water range (and hence new rigs with better specification and features are needed). 

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