Good luck to all Keppel Corp & SembMarine shareholders

[soikee]

A tsunami may be heading for Keppel Corpse & SembMarine.



Oil-rig builder Sembcorp Marine Ltd and Keppel Corporation Limited’s offshore & marine segment have one thing in common: They both see Brazil-based Sete Brasil, one of the largest rig owners in the world, as a major customer.

At the moment, Sete Brasil has orders for seven drill ships with Sembcorp Marine and six semi-submersibles with Keppel Corp that make up around 40% of each of their outstanding order books of S$11.6 billion and S$10 billion as of the third-quarter of 2015, respectively.

Problem is, Sete Brasil, might file for bankruptcy protection soon.

What does this mean for the two rig builders?

If the bankruptcy filing for Sete Brasil does happen, both Sembcorp Marine and Keppel Corp would most likely have to impair their outstanding order books and revenues that have already been recognised from the Brazilian company’s projects.

According to analysts, Sembcorp Marine and Keppel Corp have already recognized revenue from Sete Brasil projects of S$2.5 billion and S$2.0 billion, respectively, with a portion of the recognised-revenue yet to be collected and are thus still considered as account receivables.

Keppel Corp in particular might have a deep impairment charge on its hand. Its chief executive, Loh Chin Hua, mentioned in the earnings presentation for the second-quarter of 2015 that Keppel Corp has “not received payments since November 2014 for these projects,” citing payment issues with Sete Brasil.

If both Sembcorp Marine and Keppel Corp have to impair their order books as well as their already-recognised revenue, both companies may end up making losses in 2016. Moreover, it would add to the financial stresses both companies are facing given that they are already sitting on significant amount of debt.

As the chart above shows, the net-debt (total debt minus cash) to equity ratios of both Sembcorp Marine and Keppel Corp are currently above 50% and are at their highest over the past five years.

Summary:

In the worst case scenario, the survival of Sembcorp Marine and Keppel Corp might be in question. Would the two companies be able to access debt markets for additional funds to weather through the storm? Or would they have to tap the equity markets and ask new investors or existing shareholders for help? These are serious questions that the companies’ current and prospective investors, as well as management, need to consider in the coming months.

 

[gingerlyn]

why ask keppel corp take? it is semb corp baby leh

it is just my opinion. when the share price is too low, temasek may instruct take over.
just like tiger air.
what do u think?

 

[gingerlyn]

Soikee, thank you for sharing the article.
which local banks DBS OCBC UOB exposed the most to keppel and sembawang marine crisis?

 

[soikee]

Soikee, thank you for sharing the article.
which local banks DBS OCBC UOB exposed the most to keppel and sembawang marine crisis?

All three are heavily exposed. Expect poor results in their forthcoming quarterly reports.

Double barrel .... oil rig and property market collapse.

 

[soikee]

I've been happy as a lark ever since I sold short 100,000 Keppel Corpse at 5.70 on the 11th January.

Today it closed at the day's low of 4.86 which yielded me another $33,000 in paper profit.

My simple trading formula: cut loss to minimise your losses, but when you make the right bet, just let your winner run.

Despite Dow Jones surge of 228 plus points, Keppel Corpse closed down 2 cents and so that's another $2,000 in paper profit.

 

[ginfreely]

hopefully when the world goes to hell,i will be somewhere on a beach with 150k in gold,precious gems and currencies and a volkswagen van equipped with 3 230w solar panels and 4 agm batteries and inverter and all that shit,with enough power to power a small fridge and air con,and a skywater atmospheric generator that generates pure drinkable water from air,like making rain from humidity.....plus the volkwagen van is a electric van so i have unlimited power from the sun,plus a 20 gallon water tank and a belt fed ar machine gun customised to fire belt fed .22 lr bullets with 30,000 rounds of ammo imported from USA and a mossberg shotgun.in case i have to fend off scavengers and kill hostiles.any sinkies that try to steal my shit i will blow off their heads like a walker from the walking dead.

So when that happens will you tell yourself you are living a blissful and self-sufficient life with assets? Or will you tell yourself you are cut-off from society a.k.a an office cubicle and not realising you are long dead?

 

[MovieStar]

A tsunami may be heading for Keppel Corpse & SembMarine.



Oil-rig builder Sembcorp Marine Ltd and Keppel Corporation Limited’s offshore & marine segment have one thing in common: They both see Brazil-based Sete Brasil, one of the largest rig owners in the world, as a major customer.

At the moment, Sete Brasil has orders for seven drill ships with Sembcorp Marine and six semi-submersibles with Keppel Corp that make up around 40% of each of their outstanding order books of S$11.6 billion and S$10 billion as of the third-quarter of 2015, respectively.

Problem is, Sete Brasil, might file for bankruptcy protection soon.

What does this mean for the two rig builders?

If the bankruptcy filing for Sete Brasil does happen, both Sembcorp Marine and Keppel Corp would most likely have to impair their outstanding order books and revenues that have already been recognised from the Brazilian company’s projects.

According to analysts, Sembcorp Marine and Keppel Corp have already recognized revenue from Sete Brasil projects of S$2.5 billion and S$2.0 billion, respectively, with a portion of the recognised-revenue yet to be collected and are thus still considered as account receivables.

Keppel Corp in particular might have a deep impairment charge on its hand. Its chief executive, Loh Chin Hua, mentioned in the earnings presentation for the second-quarter of 2015 that Keppel Corp has “not received payments since November 2014 for these projects,” citing payment issues with Sete Brasil.

If both Sembcorp Marine and Keppel Corp have to impair their order books as well as their already-recognised revenue, both companies may end up making losses in 2016. Moreover, it would add to the financial stresses both companies are facing given that they are already sitting on significant amount of debt.

As the chart above shows, the net-debt (total debt minus cash) to equity ratios of both Sembcorp Marine and Keppel Corp are currently above 50% and are at their highest over the past five years.

Summary:

In the worst case scenario, the survival of Sembcorp Marine and Keppel Corp might be in question. Would the two companies be able to access debt markets for additional funds to weather through the storm? Or would they have to tap the equity markets and ask new investors or existing shareholders for help? These are serious questions that the companies’ current and prospective investors, as well as management, need to consider in the coming months.

Well. Keppel corp and semb corp still got other business
They may not collapse.

Problem to worry now is their debt may increasing.

Semb marine. May result in losses for this quarter.

 

[MovieStar]

As for sete Brazil. Is Brazil government link company.
No 1 in Brazil.

Who knows whether too big to fail?

 

[soikee]

I've been happy as a lark ever since I sold short 100,000 Keppel Corpse at 5.70 on the 11th January.

Today it closed at the day's low of 4.86 which yielded me another $33,000 in paper profit.

My simple trading formula: cut loss to minimise your losses, but when you make the right bet, just let your winner run.

Horsei leow! Crude oil crashes below $30 pb and Dow future has plunged by 350 points.

KC's plunge to 2.80 will cum earlier than I had expected.

 

[frenchbriefs]

So when that happens will you tell yourself you are living a blissful and self-sufficient life with assets? Or will you tell yourself you are cut-off from society a.k.a an office cubicle and not realising you are long dead?

u know maybe what u say is true,im already long dead.for years now,god knows how many.dead man walking.havent seen the obituary yet,maybe thats why i dont know im dead.

 

[Dinkum]

Despite Dow Jones surge of 228 plus points, Keppel Corpse closed down 2 cents and so that's another $2,000 in paper profit.

Boomtown Charlie for you for Brent broke the all important support level of US$30 pb to close at US$28.94 and Dow dived 390 points.

On Monday expect KC to open gap down by at least 20c.

 

[frenchbriefs]

Boomtown Charlie for you for Brent broke the all important support level of US$30 pb to close at US$28.94 and Dow dived 390 points.

On Monday expect KC to open gap down by at least 20c.

oil is too ridiculously cheap dont you think,i mean at $60 i thought oil was cheap,but now at $28?there is no way this is natural,oil prices is being fixed just like they always have.i think this is a sign,the fixer whoever they are,opec or russia or canada,is trying to throw away money and they are saying come get it while u can.

 

[MovieStar]

oil is too ridiculously cheap dont you think,i mean at $60 i thought oil was cheap,but now at $28?there is no way this is natural,oil prices is being fixed just like they always have.i think this is a sign,the fixer whoever they are,opec or russia or canada,is trying to throw away money and they are saying come get it while u can.

price war between OPEC, Russia and US. to get back the market share.

well, who can last to the end, the winner. after that, back to 70-80 region. then economy boom, 120.

so if really want to go into O&G, go into government link O&G, at least able to ride out the storm.

 

[frenchbriefs]

price war between OPEC, Russia and US. to get back the market share.

well, who can last to the end, the winner. after that, back to 70-80 region. then economy boom, 120.

so if really want to go into O&G, go into government link O&G, at least able to ride out the storm.

Most likely back above $100,I have this theory,why sell something cheaper than what people can afford to pay for it.why sell a hdb flat for 100k when people are willing to pay 400k for it,or 1k for iphone or $7 for a bowl of curry chicken or 100k for car.people have shown they can afford $140 oil,theres no such thing as fair price only how high u are willing to go.

 

[soikee]

Boomtown Charlie for you for Brent broke the all important support level of US$30 pb to close at US$28.94 and Dow dived 390 points.

On Monday expect KC to open gap down by at least 20c.

Well. Keppel corp and semb corp still got other business
They may not collapse.

Problem to worry now is their debt may increasing.

Semb marine. May result in losses for this quarter.

oil is too ridiculously cheap dont you think,i mean at $60 i thought oil was cheap,but now at $28?there is no way this is natural,oil prices is being fixed just like they always have.i think this is a sign,the fixer whoever they are,opec or russia or canada,is trying to throw away money and they are saying come get it while u can.

It doesn't matter if a cat is black or white, so long as it catches mice ~ Uncle Deng Xiao Peng.

 

[soikee]

Iran sanctions: Gulf stocks down on oil price fears




17 January 2016

A Saudi investor monitors the Saudi Stock Exchange




Shares on the Saudi Arabia Stock Exchange tumbled in early trading



Share prices in oil-rich Gulf states have dropped sharply after the lifting of economic sanctions on Iran.

The Saudi Arabia Stock Exchange fell 5.4% on Sunday, while the Qatar Exchange closed down 7% and Dubai's stocks dropped 4.6%.

Those exchanges are dominated by energy firms who fear oil will fall further from its current 12-year low of $29 when Iran resumes oil exports.

Iran has said it will sell up to 500,000 extra barrels of crude oil.

Economic sanctions, in place for nearly 40 years, were lifted after inspectors confirmed on Saturday that Iran had taken the required steps to limit its nuclear programme.

Investors reacted immediately in the first day of trading in the Muslim week.

The Saudi Tadawul All Share Index, the largest market in the region, dropped during trading to its lowest level since early 2011, closing at 5,520 points.

Share prices in all six of the other Gulf stock exchanges also dropped, as investors weighed up a stronger Iranian economy and extra oil in an already over-supplied market.

Saudi Arabia's oil minister Ali al-Naimi said it would take "some time" to restore stability to the global oil market, but added that he remained optimistic.


Analysis: Joe Lynam, BBC business correspondent

It's a bit surprising that markets are surprised - Iran has promised since the Vienna agreement was signed in July to pump 500,000 additional barrels of crude per day when sanctions were lifted.

Most oil traders have accelerated their sell-off of oil, gas and energy companies in the run up to Saturday's well flagged announcement by the IAEA (International Atomic Energy Agency).

And yet there's been a rout on Gulf stock markets today (Sunday is a full trading day in the Middle East).

In fact, the Tadawul All Share Index in Riyadh has halved since the summer of 2014 when oil prices started their precipitous fall from $115 to $29 per barrel.

Although Gulf nations are petroleum-based economies, listed companies in most sectors were down - apart from Iran of course. That's because Iran is now expected to be the main beneficiary of billions of dollars of new investment from the West - money which might have previously been spent in other Gulf nations.


Iranian President Hassan Rouhani said on Sunday that the deal was "a turning point" for Iran's economy.

The lifting of sanctions also enables Iran to use the global financial system for trade.

Estimates say close to $100bn (£70bn) of Iranian assets will be unlocked under the nuclear deal.

 

[yahoo55]

The 'fruits are not swelling'....bad times, is slowly but surely had arrived..but not to worry, the PAP can, 'upturn the downturn'....for they have introduced new 'actors'...in the playhouse called "THE PARLIAMENT"..stay tune...help is on the way...

PAP's so called "economic growth" the last few years has been all about swelling debts and huge spending. Sinkieland has accumulated massive private debts from the credit binge of the last 6 years which could lead to massive bad loans when exports crash and interest rates hike to normal levels.

PAP are very overpaid and useless wayang kings, and they are leading Sinkies to Horlan. Song boh 69%, you voted for this shit.

Singapore bank stocks punished as oil woes escalate

Published: 18 Jan 2016

Earnings are under threat as bad loans multiply.

Singapore’s three largest lenders have experienced a steep share price drop in the first two weeks of the year, mainly on back of worries that there will be more loan defaults as oil prices crash to record lows.

According to RHB Research, current share price levels imply that the market may be pricing in a 10% default rate on oil and gas exposures. This is similar to non-performing loan (NPL) ratios recorded during the Global Financial Crisis, when DBS booked a 10.4% default rate for financial services firms, while OCBC’s and UOB’s bad loans from the manufacturing sector hit 6.9% and 7.7%, respectively.

“Growing predictions that oil prices would stay at depressed levels are stoking fear that Singapore’s three listed banks (SG Banks) would soon be hit with rising defaults in their oil and gas exposures,” said RHB.

- See more at: http://sbr.com.sg/energy-offshore/n...nished-oil-woes-escalate#sthash.ij5bkdRI.dpuf

Non-oil domestic exports slip 7.2% in December

Published: 18 Jan 2016

Non-oil domestic exports (NODX) dipped by 7.2% YoY in December 2015 on back of a contraction in electronic and non-electronic NODX, according to a report by IE Singapore. The report also noted that this slip is worse than November 2015’s 3.4% pullback.

Electronic NODX inched up by 0.3% in December 2015, in contrast to the preceding month’s 0.6% growth. The report asserted that the decline was due largely to ICs (-11.3%), parts of PCs (-13%), and disk drives (-22%).

Meanwhile, non-electronic NODX contracted by 10.3% in December 2015, following the 5.1% pullback in the preceding month. The slide in non-electronic NODX was led by petrochemicals (-17.5%), primary chemicals (-41.8%), and civil engineering equipment (-43.5%).

On a YoY basis, total trade contracted by 8.4% in December 2015, following the 6.8% pullback in the previous month. Total exports slipped by 6.4%, following November 2015’s 7.6% pullback. Meanwhile, total imports tumbled by 10.6% in December 2015, following the preceding month’s 5.8% decline.

- See more at: http://sbr.com.sg/economy/news/non-oil-domestic-exports-slip-72-in-december#sthash.T7QJIwoi.dpuf

 

[gingerlyn]

PAP will be exposed.

 

[soikee]

Well done ... Keppel Corp has become Keppel Corpse and this morning I shorted 100 lots of Keppel Corpse at 5.70.

Today bought 100,000 Keppel Corp at 4.70 to cover my short position.

 

[bushtucker]

oil price is a cyclical thing. now it has hit a snafu but once it recovers to $80/barrel, these O&G companies will be shining again.