Seatrium (SGX: S51) shares are down 3.5% today. That makes it 17% down for the month for S51 shares. There’s no specific news driving this. There’s been no repeat of the bribery problem for example. Nor even of the historic problems in Brazil back when it was Sembcorp Marine. It’s simply necessary to take it as part of the ebb and flow of opinion over likely prospects.
There has been some mild excitement as the new Shell whale unit is delivered: “Seatrium has delivered an FPU for deployment at Shell’s Whale project located in the Alaminos Canyon in the US, part of the Gulf of Mexico. The delivery forms part of a contract awarded by Shell Offshore to Sembcorp Marine Rigs & Floaters in November 2019.” But note that’s been in the accounts - the contract at least - for 4 years now. This is not exactly news. OK, that it arrived is good, but not really a driver of the share price.
There’s also been other Shell connected news for Seatrium: “Seatrium (SGX: S51) shares are back down 2% today. S51 shares are now just about back to where they were before the Shell deal was announced. Which gives us a useful indication of the trading range really. Sure, so some interesting news comes along, there’s a blip. But it is a blip, not a sustained change in price level. The difficulty, we think, is the industry that Seatrium’s in. Yes, offshore services, ship building, what with the wind revolution it’s obviously a growth area. Yet every country seems insistent on subsidising its own shipyards - therefore there’s little to no profit in the game.”
Seatrium share price from Google Finance
Our basic view of Seatrium is that there’s nothing very interesting going on here. Just changes in market sentiment about how well the company’s going to do in the medium term future. Which in itself is not very exciting for as we say, there’s far too much state subsidised competition in the shipyard and offshore work world.