Clear survivors emerging in O&M sector: UOB Kay Hian

Singapore

SINGAPORE'S offshore and marine (O&M) sector remains cash-flow stressed, but a review of core margins showed that clear survivors are emerging in the sector despite the financial pressure of a multi-year downturn, UOB Kay Hian noted in its latest sector update.

The brokerage noted that cash flow remains a pressure point in FY16 with core EBITDA (earnings before interest, tax, depreciation and amortisation) margins declining by 4.2 per cent on average to 16.2 per cent.

In FY16, listed O&M players booked impairment charges of US$1.7 billion, largely driven by small- to mid-cap offshore support vessel players impairing the va…