Once as blue (a chip) as the oceans where its rigs, floaters and platforms operated on, Sembcorp Marine (Sembmarine) is now worth a few cents per share because of two rights issues in 2020 and 2021 which raised a total of $3.6 billion due to the collapse in oil prices and its Brazilian contracts.
In the years leading up to 2014 and 2015, Singapore was the world’s largest rig builder — only to be overtaken by the Chinese yards as the years wore on. Now, just as Sembmarine is recovering on the back of higher oil and gas prices, it is losing its identity as an independent standalone company.
In a business update, Sembmarine announced that its cash flow and liquidity management have improved following the completion and deliveries of several projects in 1QFY2022 ended March. As a result, the group’s net debt/equity ratio has improved to 0.38x at end 1QFY2022 from 0.49x at end 4QFY2021. This translates into lower net debt levels of around $800 million, compared with around $1.97 billion as at end 4QFY2022.
