$Seatrium Ltd (5E2.SG)$ Basically the new management is clea...
$Seatrium Ltd(5E2.SG$ Basically the new management is clearing the shit from ex management so why are you guys blaming the new ones. It takes time for new management to show result since business plan is not an elixir where a company swallows a bitter pill and good result comes the next moment. This company has a staggering SGD 3B of debt all thanks to ex sembcorp marine management and now this new guy is trying to clear the shit. Banks offer different interest rates and the company is now probably paying 7 to 11% interest. For easy calculation, if you assume an interest of 10%, that comes to 300M every year. And this is just interest and not paying off principle. So now you guys have an idea of the difficult job this new guy is undertaking. Frankly speaking, company is still winning lots of projects now though not sure about profit margin and investors have to give it time so that we know how well company is managing cashflow so give it some time. I believe the report on 28 May should be good/normal since the last AR had a severe writeoff but this may not reflect directly on stock price immediately since it will probably not be a direct implication that the company has made a turn around within a short span of time. Wait for next AR before deciding to invest in this company, and definitely DO NOT look at EBITDA since this is a company with high debt so we must look at its cashflow etc. The only way out of this mess is probably to do a rights issue to par down debt although this will certainly be unfair for investors who have already stayed with this company for very long and did 2 rights issue prev but given this high interest rate environment, its hard for any company with high debt to survive if all the profits are just to pay off interest
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Value investing takes a lot of work but carries you a long way and makes more money than any other strategies
26Followers
0Following
126Visitors
Follow
103532591 :
.Any profit taken,high risk behind it?
Shootingstar : They can't report losses for much longer and if they go bankrupt temasek will have to pay many penalties for the contracts already obtained. If this company is gone maybe 5 billion in ld have to be paid out
cowpehcowmooOP Shootingstar: If profit cant pay off interest then they have no choice but to keep reporting losses. Furthermore Temasek has nothing to do with paying off Seatrium liabilities since they are just one of the investors. The only thing valueable in Seatrium is their renewables ip but whether its worth Temasek dumping more money to save it will be questionable. I'd like to think that Temasek will save them if it comes to that since SG government is very much into renewables and carbon neutral, and SG is a major shipping hub and its impossible for SG to give Malaysia ship repair/building businesses by closing our biggest yard (no other shipyard comes close to handling such scales) but at what price would Temasek save it if it comes to that? And thats the reason why it may not yet be the time to invest in Seatrium since risk is still very high and yet to see the light at the end of tunnel. Wait for next result even if it means you lose that initial 10-20% rebound from lowest
cowpehcowmooOP 103532591: Not yet vested in this counter as I am waiting for next AR and hopefully a Rights issue before deciding again there and then
Shootingstar cowpehcowmooOP: Won't be another case of ok lim. Banks have learnt their lessons and Seatrium is giving banks a cut in returns for their influence to get more contracts while giving banks some business during these dark times. Just a gut feeling
soyabean89 : yet they call for higher director fee when company not profiting. might as well tell them stock compensation better. at least this will also drive them to do better
BagHolder23 : Seatriums customers probably demand to look at their books before risking the project budgets worth 100s of millions of dollars and Seatrium is still getting orders so that is an encouraging sign.
They also announced $100 million buy back scheme next year, and that money has to come from somewhere other than a rights issus, perhap their forcast profits?
We might not expect dividend payouts but we investors should see some gains due to share price increase next year, they will probably offload those more valuable shares agsin to fund further development of the business.
Also, shares are being traded, the price is going down but someone is buying.
cowpehcowmooOP BagHolder23: Iirc they have about 2B cash so the 100M share buyback is allocated from here but this is part of the operation
BagHolder23 cowpehcowmooOP: okay, thanks for the information.
It is still a positive sign in that they are expecting returns above what they could get in a cash fund or fornpaying down debt.
Hopefully some gold in the 1Q results next week.