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RHB Research on Thursday said delivery risks and sustained payment delays from Sete Brasil continue to exert pressure on Sembcorp Marine's shares.
The company's Q1 2015 profit after tax and minority interests (Patmi) at S$106 million met only 18.5 per cent of RHB's earnings estimates.
This was mainly attributable to lower average revenue per vessel repair.
Operating margins were lower at 10.6 per cent in the first quarter from 16.1 per cent in Q4 2014, which were boosted by "operational efficiencies" that now appear unsustainable.
The research house has maintained a "neutral" call with a target price of S$2.90 (1.7 per cent downside).