SembMarine

SembMarine: 2Q11 results weaker than expected due to timing issues.
Revenue at $831m, 24% yoy, unchg qoq, as the new rig contracts secured since 4Q10 are still at the planning stage and have not been recognized.
Net profit at $150m, -15% yoy, -1% qoq.
Operating margins at 19.1%, while down from 20% in 1Q11, were higher than last yr’s 18.4%, reflecting pdt mix changes and efficiency gains on repeat orders, which more than offset the cost and forex impact.
Co proposed interim div of 5cts, unchg yoy.

Mgt sanguine on 2H11 prospects. Expects the much publicized deepwater semi, SOnga Eclipse (contract value US$640m) to be delivered in 3Q11, with >70% of revenue and earnings to be recognized in the same quarter. With an estimated record total of 8 units of FPSOs, fixed platforms and offshore projects to be delivered in 2011, earnings will likely be backend loaded.

Order book stands at $5.7b. Note that there were virtually no orders for 2Q, although SMM secured $1.1b of orders over Jul-Aug, taking ytd order wins to $2.6b. The co still has 8 unexercised options (~$2b) stretching into early 2012. Mgt expects FPSO and fixed-platform related order flow to be very strong and new build momentum to pick up in 2H11.

Nevertheless reduced prospects at Cosco have led some analysts to lower their TP.
Deutsche maintains Buy, lower TP from $7 to $6.30.
BNP maintains Buy, lowers TP from $6.78 to $6.43.
Citi maintains Buy with TP $6.20.
CIMB maintains Outperform and TP $6.45