South East Asia Marine Engineering & Construction Ltd.
CMP - Rs.194 NSE Symbol : SEAMECLTD BSE Code -526807
Backing of a strong parent, strong charter rates, visibility of strong earnings in the future and the company's debt free status make SEAMEC a good investment opportunity.
South East Asia Marine Engineering & Construction Ltd. (SEAMEC), is a 78.24% subsidiary of Coflexip Stena Offshore Mauritius Ltd. Coflexip Stena Offshore Mauritius Ltd. is owned by Technip S.A of France. SEAMEC is engaged in sub-sea engineering and inspection of under water structures and operates multi-support vassels.
TECHNIP - BRIEF BACKGROUND
TECHNIP is a French company and a leading player in Engineering, Technologies and Construction services for the Oil & Gas, Petrochemical and other industries.
With a workforce of 21,000 people worldwide, and annual revenues of about 5.4 billion euros, TECHNIP ranks among the 5 major players in full-service engineering and construction services in the field of oil & gas, hydrocarbons and petrochemicals.
TECHNIP is one of the most integrated groups providing engineering, technologies and construction services to the oil/gas and petrochemical industry worldwide. The company has large industrial facilities, employs state-of-the-
TECHNIP is listed in New York and in Paris
SEAMEC - BRIEF BACKGROUND
SEAMEC was formed in 1996 as Peerless Shipping & Oilfield Services Ltd. and owned three Offshore Vessels and has taken delivery of a new vessel in July 06 taking the total number of vessels to four. The company also had an Onshore Drilling rig which it disposed in 2004 to a Dubai based company for US $ 3.1 million.
SEAMEC is currently engaged in the business of operating multi -purpose support vessels for diving and for providing underwater /sub-sea construction, maintenance, and other support services for offshore oil and gas installations and other industries, located in India or abroad.
The company had three vessels and acquired a fourth one in mid 2006. The vessels are - SEAMEC I, SEAMEC II, SEAMEC III and SEAMEC Princess.
SEAMEC I is under a long term charter with Dolphin Offshore Enterprises Ltd. for a period of 2 years since September 2005. The company thereafter was awarded a contract from ONGC at a higher rate and the contract with Dolphin Offshore was suspended in July 2006 on mutually agreed terms.
SEAMEC II was engaged in spot market at Indian Offshore with M/s Global Industries, USA during the first half of the year 2006. During the second half, the vassel was deployed with M/s Condux SA starting August 2006 for working in Gulf of Mexico.
SEAMEC III was engaged in Indian spot market working with various Indian and International Oil & Construction companies such as British Gas and Jindal Offshore and thereafter has been on charter with Offshore Technology Solutions Ltd. at Trinidad & Tobago.
SEAMEC Princess was delivered to the company in July 2006 and was thereafter on charter for about 27 days undertaking cable laying job with a Dubai based company. The vassel is currently undergoing modifications at a budgeted cost of around Rs.70 crores and is expected to be ready by May 2007.
Financials
As regard, financial performance, for the financial year ended December 2006, the company has registered Sales Revenues of 159 crores as against Rs. 82 crores during the year ended December 2005. The Net Profit is Rs.58.47 crores as against a profit of Rs.19.32 crores for year ended December 2005.
| Particulars | Quarter Ended | Quarter Ended | Quarter Ended | Year Ended | Year Ended | Year Ended |
| Sales | 61.6 | 27.41 | 124.7 | 159.13 | 82.28 | 93.4 |
| Other Income | 0.5 | 1.42 | -64.8 | 4.5 | 6.22 | -27.7 |
| PBIDT | 30.87 | 19.27 | 60.2 | 75.26 | 33.45 | 125 |
| Interest | 0.08 | 0.19 | -57.9 | 0.27 | 1.04 | -74 |
| PBDT | 30.79 | 19.08 | 61.4 | 74.99 | 32.41 | 131.4 |
| Depreciation | 4.63 | 2.88 | 60.8 | 14.92 | 11.2 | 33.2 |
| PBT | 26.16 | 16.2 | 61.5 | 60.07 | 21.21 | 183.2 |
| Tax | 0.3 | 0.49 | -38.8 | 1.5 | 1.89 | -20.6 |
| Deferred Tax | 0 | 0 | - | 0 | 0 | - |
| PAT | 25.86 | 15.71 | 64.6 | 58.57 | 19.32 | 203.2 |
(Source : Capitaline)
| Latest Data As On 05/04/2007 | |
| Latest Equity(Subscribed) | 33.9 |
| Latest Reserve | 203.72 |
| Latest Bookvalue -Unit Curr. | 70.09 |
| Latest EPS -Unit Curr. | 17.21 |
| Latest Market Price -Unit Curr. | 194.45 |
| Latest P/E Ratio | 11.3 |
| 52 Week High -Unit Curr. | 239 |
| 52 Week High-Date | 2/19/2007 |
| 52 Week Low -Unit Curr. | 100 |
| 52 Week Low-Date | 4/13/2006 |
| Market Capitalisation | 659.19 |
| Stock Exchange | BSE |
| Dividend Yield -% | 0 |
(Source : Capitaline)
With the eyes of the world now on the energy especially the oil sector in India, there is bound to be increased activity in the sector. Access to parent's technology and experience will strengthen the company's position.
CONCLUSION
With increased activity taking place in the Oil & Gas sector in India and overseas, the demand for Offshore vessels has increased. This has led to an increase in Charter Rates for Offshore vessels.
There is a strong demand for Multi Support Vessels (MSVs) coming from Middle East, West Africa, and Russia. The role of the parent Technip assumes a great significance in helping SEAMEC realize the best possible charter tariffs in these markets. The demand from these markets is on account of the previously discovered fields being brought online and at the same time due to the need to upgrade, repair and maintain the existing aging offshore facilities and repair and maintenance of underwater pipelines. This is fast leading to a high-demand-
The current resources of the company are adequately deployed and with the new Vessel getting ready for deployment from June 2007 onwards, one can expect substantially higher income for the second half of the current FY.
The benefits of higher charter rates and the growing demand augur well for the company's business.
The backing of a strong parent, strong charter rates, visibility of strong earnings in the future and the company's debt free status make SEAMEC a good investment opportunity.
BigGains !!
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