Shares of Singapore oil rig builder Sembcorp Marine (SCMN.SI) fell as much as 4.7% on Wednesday after the firm posted a 15% drop in second quarter net profit despite stronger margins.
At 10:42 a.m., Sembcorp Marine shares were down 2.8% at $5.15 on a volume of 3.2 million shares, around 67% of the average daily volume in the last 30 days. The broader Straits Times Index <.FTSTI> was 1.7% lower.
“Going forward, people are getting a bit nervous, and the numbers at the moment are not that encouraging,” said a local trader.
DnB NOR said in a report that Sembcorp Marine's second-quarter earnings were below its estimates mainly due to slower-than-expected revenue recognition of the Songa Eclipse rig, which is capable of drilling in deep waters.
However, margin trends are holding up well, DnB NOR said, adding that it expects higher rig-building contributions in the third quarter, with the Songa Eclipse rig due to be delivered in that period.
DnB NOR maintained its hold rating and target price of $5.30 on Sembcorp Marine stock.
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