tag:blogger.com,1999:blog-6213354074634538714.post3584428531130032084..comments2023-08-03T23:30:19.645+08:00Comments on (The) Boring Investor: Is Keppel Corp's Provision for Sete Brasil's Orders Adequate?Lee Chin Waihttp://www.blogger.com/profile/10250390011842795509noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6213354074634538714.post-89795827584632209352016-08-09T00:37:58.490+08:002016-08-09T00:37:58.490+08:00Hi Rolf,
Yes, a lot of insider info is needed to ...Hi Rolf,<br /><br />Yes, a lot of insider info is needed to estimate the provisions accurately.<br /><br />Agree with you Sete Brasil is not the main issue for Keppel Corp. The main issue is the lack of orders!Lee Chin Waihttps://www.blogger.com/profile/10250390011842795509noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-5113269968309221802016-08-09T00:30:07.907+08:002016-08-09T00:30:07.907+08:00Hi, DBS / Swiber case might not be comparable to t...Hi, DBS / Swiber case might not be comparable to this case. Before Swiber annnounced the unexpected winding-up, the probability of Swiber closing down is less than 100%, so provisions made are less than 100% of the loans. But when Swiber announced winding-up, 100% of the loans need to be provided for.<br /><br />In the case of Keppel / Sete Brasil, Sete Brasil shareholders were already debating whether to seek bankrupcty protection when Keppel made those provisions. Thus those provisions had already considered Sete Brasil going into bankruptcy protection.Lee Chin Waihttps://www.blogger.com/profile/10250390011842795509noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-84858890108186167982016-08-08T20:19:11.283+08:002016-08-08T20:19:11.283+08:00Hi CW,
One thing is the $1.3b usd received as dow...Hi CW,<br /><br />One thing is the $1.3b usd received as down payment is for 6 rig contracts! In fact as far I know the first two were having lots of work in progress and the 4 balance rigs very little work done. So if we consider that Keppel had conservative gross margin of 15% of each rig this means the cost of the first two rigs will be (6.2/6) x 0.85 for 2 vessels (x2) = $1.76b. <br /><br />So assuming their WIP for first two rigs are average 80% = 1.4b incurred. <br /><br />So the provision of $200mil plus the down payments is probably how this is derived from! <br /><br />Because u do not know how many rigs had been completed w/I insider info, it's difficult for u to estimate! <br /><br />I think this is why Keppel corp CEO is quite confident. He is a finance guy with CFO background normally more conversative. <br /><br />The problem now with Kep corp is not sete brasil, but with other rigs that cannot be delivered n the overheads in kep as shipyards worldwide is really too high if they have not enough order intake! Rolf Sueyhttps://www.blogger.com/profile/10723925075715114650noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-53720183275908075772016-08-08T16:10:22.104+08:002016-08-08T16:10:22.104+08:00Hi. I dont think so its enough because the provisi...Hi. I dont think so its enough because the provision is only just 4% of the contracts. Using my experience as a Business Manager for 2 decades to make a guess. Hope I am wrong though.<br />Also borrowed from DBS / Swiber case. What the CEO said last Q was overturned when Swiber incident surfaced. Amount doubled. Haha.<br />More to come...Henryhttps://www.blogger.com/profile/11824479927853149272noreply@blogger.com