S$4.10-SWMS.SI
? Management is, again attributing the y-o-y drop in net profit (to $222.5 mln) to the fact that most of the jack-up rig orders secured since Q4 ’10 “are still at the planning stage”, which continues to underscore the importance of new order flows.
? In the year-to-date, SMM has secured new orders worth $3178 mln, of which $561 mln came after the release of Q2 results in August, admittedly somewhat slow compared to Keppel Corp’s Offshore Division. Net order books stand at $5188 mln.
? Strip out the $52.6 mln exceptional gain a year ago, however, the drop is a more palatable 9%. ? Fact is management remains optimistic of securing more offshore contracts given the still-robust state of the business, with crude where it is (Brent yesterday rose US$1.38 / 1.3% to US$110.72 a barrel).
? At $4.10, trailing PE is 11.2x.
? We maintain BUY.
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