SembMarine says unaware of reasons behind unusual trading activity

SINGAPORE (July 17): Sembcorp Marine (SembMarine) says it is unaware of the reasons behind the unusual trading activity of its shares on Wednesday.

This was in response to a query issued by the Singapore Exchange following a 7.9% jump in its share price on Wednesday.

The counter had hovered within the $1.41-1.42 range for most of Wednesday, before climbing to $1.495 shortly after 4pm with almost 6 million shares traded.

It reached an intra-day high of $1.53 minutes before the market closed, and ended trading at $1.51, up 11 cents.

A total of 21.3 million shares worth $31.76 million changed hands during the day, making it one of the most heavily traded securities on the Singapore bourse.

SembMarine also said it negotiates contracts with its customers in its ordinary course of business although there is no certainty that any transaction will materialise.

Sembmarine noted there were various reports in the media and rating updates by stock-broking firms recently that might have an impact on the share price.

The company said it will issue announcements if and when there are material contracts secured, in compliance with SGX listing rules.

SembMarine has made the headlines of late. On July 10, the offshore & marine (O&M) subsidiary of Sembcorp, lodged a suspicious transaction report linked to the former president Martin Cheah Kok Choon of Braziliam subsidiary EJA with the Commercial Affairs Department of the Singapore Police Force.

See: SembMarine lodges suspicious transaction report linked to ex-EJA president Martin Cheah

See also: Police raid a reminder that Sembcorp Marine's Brazil woes are far from over

This came a week after the group revealed that EJA's yard in Brazil was raided by the Brazilian federal police under Operation Car Wash, the codename for the corruption probe into Petrobras, Brazil’s national oil company, in which other companies paid officials at the oil producer to win business.

See: Police raid premises of SembMarine subsidiary in Brazil

Separately, SembMarine also said that the outlook for its O&M business remains bleak as competition is expected to remain tough and production activity low, despite more enquiries and tenders for offshore production units, engineering solutions and gas-related projects.

In 1Q19, SembMarine secured new orders worth just $175 million, compared to the billions in contracts it used to clinch before the O&M downturn started.