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But that 1.5B debt was taken in 2019. So by right Jun2020 it should be somewhere in the debt already. If we take it out again, not sure if it' s double counted. (so instead of 1.5B, it has become 3.0B)
bystander1965 ( Date: 16-Jan-2021 11:25) Posted:
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That' s because SCI took on the 1.5B loan (debt) so effectively its equity will decrease by the same amount.
What I do not agree is the guessed asset and debt numbers of SCI after the demerger.
His original asset and debt numbers for SCI from yahoo for June2020 are also completely different from SCI june2020 financial report.
What I do not agree is the guessed asset and debt numbers of SCI after the demerger.
His original asset and debt numbers for SCI from yahoo for June2020 are also completely different from SCI june2020 financial report.
naoshingo ( Date: 16-Jan-2021 11:12) Posted:
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Before demerger, SCI loaned SMM $1.5 billion. This is called the subordinated loan.
SCI write off the $1.5billion loan to SMM in exchange for the rights share to distribute to their shareholders together with the mother shares.
Effectively, most of the free SMM shares that SCI shareholders received is from the writing off the $1.5billion loan to SMM.
Most of the cash that SMM has in their book now, actually comes from SCI.
To give life to SMM, basically Temasek tucked SCI under the bus.
SCI write off the $1.5billion loan to SMM in exchange for the rights share to distribute to their shareholders together with the mother shares.
Effectively, most of the free SMM shares that SCI shareholders received is from the writing off the $1.5billion loan to SMM.
Most of the cash that SMM has in their book now, actually comes from SCI.
To give life to SMM, basically Temasek tucked SCI under the bus.
May I also clarify...
Where does this come from? " 1.5 (write off subordinated loan) "
Where does this come from? " 1.5 (write off subordinated loan) "
better ( Date: 16-Jan-2021 10:15) Posted:
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Btw write off is write off. Don't think any company will happily do that just to achieve some motives. KC is doing divestment so call unlock shareholder value. The real effect maybe is to really pare.down their debt. But unlock sh value sounds much better and positive. 😂 Ok back to SMM.
The numbers I use are approximate cause you were just doing some paper.napkin calculation anyway.
Nop I took out smm numbers. If yahoo number is from Jun then it's completely different from sci June report because its June should be sci number cum smm. Reuters don't even attempt to split these numbers by themselves for June. I doubt yahoo will have the ability to do so.
And what makes u think I dont understand.accounting? 🤔
Anyway come Feb we will have a better picture. Though the number will still have some smm influence. Btw sci debt has been increasing from 2015 or 16 just as smm was beginning to have problems and increasing its debt. Will be interesting to see how much of those were due to smm debt. Feb or aug this year especially will provide a much better insight. No need to guesstimate.
better ( Date: 16-Jan-2021 10:36) Posted:
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Why sometime u guys mentioned SMM and SCM as well. Confusing. I think SCM more approriate imo
UOB Kay Hian said otherwise that Sembcorp Industries - Well positioned for recovery in 2021 with a higher target price of $2.02.
Last 3 years has divested a number of businesses, maybe that help to mitigate the debt/equity ratio.
But why are we discussing about SCI ? Likewise Keppel Corp 2030 vision also has divested many many businesses. The coming fy financial report should be good
Last 3 years has divested a number of businesses, maybe that help to mitigate the debt/equity ratio.
But why are we discussing about SCI ? Likewise Keppel Corp 2030 vision also has divested many many businesses. The coming fy financial report should be good
SMM' s current equity is about $3.9+billion
Godwinlow ( Date: 16-Jan-2021 10:23) Posted:
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Wrong,
I use the figures from Yahoo Finance, which is updated til 30 June 2020 based on their respoective half yearly reports.
Keppel' s debt/ equity ratio would have been closer to 100% if they did not intentionally declared the massive writre off in Q2 to get Temasek off the conditional buyout hook.
Second, SCI' s balance sheet in their financial statement is a " consolidated" financial statement, including SMM' s asset and minus Non controlling interest (NCI). Typically, you need an accountancy degree to understand all the calculations. Most would be better to use figures from yahoo finance, which is quite accurate til the cut off date.
I use the figures from Yahoo Finance, which is updated til 30 June 2020 based on their respoective half yearly reports.
Keppel' s debt/ equity ratio would have been closer to 100% if they did not intentionally declared the massive writre off in Q2 to get Temasek off the conditional buyout hook.
Second, SCI' s balance sheet in their financial statement is a " consolidated" financial statement, including SMM' s asset and minus Non controlling interest (NCI). Typically, you need an accountancy degree to understand all the calculations. Most would be better to use figures from yahoo finance, which is quite accurate til the cut off date.
bystander1965 ( Date: 16-Jan-2021 05:38) Posted:
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What' s SMM equity value for now?
better ( Date: 16-Jan-2021 10:15) Posted:
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Simple.
Equity is 6.65 billion before demerger.
6.65 - 1.5 (write off subordinated loan) - 1.1 (their equity stake in SMM) - 0.1 (their write off/loss for H2 2020)
= 3.95 billion.
Equity is 6.65 billion before demerger.
6.65 - 1.5 (write off subordinated loan) - 1.1 (their equity stake in SMM) - 0.1 (their write off/loss for H2 2020)
= 3.95 billion.
How did you derive the SCI Equity- 4 billion ?
better ( Date: 16-Jan-2021 01:41) Posted:
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Hopefully over the weekends or Monday before markets opens. Keppel will reveal its O& M plan
It' s interesting you are hell bent on making SCI numbers look bad. First if you want to compare, compare the same period. You use SCI latest including 2H2020 write off but KC' s based on 2019 data. Don' t forget KC wrote off some 900m in 2020 also. Anyway KC is not a good comparison because it has many different businesses.
And I am not sure where you get those asset/debt/equity numbers from. They differ quite a bit from SCI/SMM' s report or even Reuter' s numbers. Is it in USD? If yes then you are mixing USD and SGD in your numbers.
According to SCI pro forma, debt will be 8.7B based on Dec2019 after the demerger. This is debt not liabilities but you are using debt/equity = liabilies/(asset-liabilities). So cannot do an apple-to-apple comparison. (you can see from the equation a slight change in the liabitlies numbers, the ratio will change quite a bit. Putting liabilities 0.5 or 0.6 and asset as 1, the ratio changes from 100% to 150%!)
But by using all the numbers from the reports from SCI/SMM, the debt ratio in fact will improve from 2.5 to ~2 based on my own calculations. (But if I use your numbers it would be < 1.5) Nothing to shout about. But see the Investopedia snippet.
Incidentally Blackrock and Charles Schwab increase their holdings in SCI in Dec2020. In fact Charles Schwab cut ~80% of their SMM holding in Dec2020 which I suspect caused the price to drop from 17x to 162 and then shortists took over after that to drive it down to 138. But Blackrock also increased its SMM holdings in Dec2020.
From Investopedia
D/E Considerations for the Utilities Sector
Evaluating a company using the D/E ratio is dependent on the company' s industry. Capital-intensive industries, such as utilities, have relatively higher D/E ratios. Therefore, D/E ratios should be considered in comparison to similar companies within the same industry. Generally, ratios of 0.5 and below are considered excellent, while ratios above 2.0 are viewed more unfavorably.
Utilities often carry high debt levels as their infrastructure requirements make large, periodic capital expenditures necessary. However, they also have a large amount of investment equity because they are such " bedrock" stocks they are included in the investment portfolio of many funds and individual investors.
And I am not sure where you get those asset/debt/equity numbers from. They differ quite a bit from SCI/SMM' s report or even Reuter' s numbers. Is it in USD? If yes then you are mixing USD and SGD in your numbers.
According to SCI pro forma, debt will be 8.7B based on Dec2019 after the demerger. This is debt not liabilities but you are using debt/equity = liabilies/(asset-liabilities). So cannot do an apple-to-apple comparison. (you can see from the equation a slight change in the liabitlies numbers, the ratio will change quite a bit. Putting liabilities 0.5 or 0.6 and asset as 1, the ratio changes from 100% to 150%!)
But by using all the numbers from the reports from SCI/SMM, the debt ratio in fact will improve from 2.5 to ~2 based on my own calculations. (But if I use your numbers it would be < 1.5) Nothing to shout about. But see the Investopedia snippet.
Incidentally Blackrock and Charles Schwab increase their holdings in SCI in Dec2020. In fact Charles Schwab cut ~80% of their SMM holding in Dec2020 which I suspect caused the price to drop from 17x to 162 and then shortists took over after that to drive it down to 138. But Blackrock also increased its SMM holdings in Dec2020.
From Investopedia
D/E Considerations for the Utilities Sector
Evaluating a company using the D/E ratio is dependent on the company' s industry. Capital-intensive industries, such as utilities, have relatively higher D/E ratios. Therefore, D/E ratios should be considered in comparison to similar companies within the same industry. Generally, ratios of 0.5 and below are considered excellent, while ratios above 2.0 are viewed more unfavorably.
Utilities often carry high debt levels as their infrastructure requirements make large, periodic capital expenditures necessary. However, they also have a large amount of investment equity because they are such " bedrock" stocks they are included in the investment portfolio of many funds and individual investors.
better ( Date: 16-Jan-2021 01:41) Posted:
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Before rights issue,
SCI
Asset- 19.29 billion
Equity- 6.65 billion
debt- 12.64 billion
Debt/ Equity ratio is 190% as indicated in yahoo finance
SMM before rights issue
Asset- 7.4 billion
debt- 4.1 billion +1.5 billion subordinated loan
SCI owns 61% of SMM then
After rights issue,
SCI
Asset- 19.29 - (7.4 x 0.61) - 1.5 subordinated loan = 13.2 billion
debt- 12.64 - (5.6 x 0.61) = 9.2 billion
Equity- 4 billion - about 100 mil write-off/ losses in 2020- 3.9 billion
Debt/ Equity ratio is 9.2 / 3.9 = 236%
Keppel corp at 125% (according to Yahoo Finance) is already considered high.
SCI at above 200% is nose bleed level.
That could be why SCI' s CFO run road first.
SCI
Asset- 19.29 billion
Equity- 6.65 billion
debt- 12.64 billion
Debt/ Equity ratio is 190% as indicated in yahoo finance
SMM before rights issue
Asset- 7.4 billion
debt- 4.1 billion +1.5 billion subordinated loan
SCI owns 61% of SMM then
After rights issue,
SCI
Asset- 19.29 - (7.4 x 0.61) - 1.5 subordinated loan = 13.2 billion
debt- 12.64 - (5.6 x 0.61) = 9.2 billion
Equity- 4 billion - about 100 mil write-off/ losses in 2020- 3.9 billion
Debt/ Equity ratio is 9.2 / 3.9 = 236%
Keppel corp at 125% (according to Yahoo Finance) is already considered high.
SCI at above 200% is nose bleed level.
That could be why SCI' s CFO run road first.
naoshingo ( Date: 16-Jan-2021 00:46) Posted:
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How did you derive 250%?
better ( Date: 15-Jan-2021 23:45) Posted:
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Wrong, Keppel Corp' s Debt/ Equity ratio is about 125%. Sembcorp Industries is double at about 250%.
It is not just how much debt you have, but also how much assets you have to back it up.
Even at 125%, many are saying that Keppel' s debt is too high. 250% is at absolutely nose bleed level. SCI is still walking despite being dead because people expect Temasek to bill it out if need be.
But likely bill out with a highly dilutive rights issue, Temasek style.
It is not just how much debt you have, but also how much assets you have to back it up.
Even at 125%, many are saying that Keppel' s debt is too high. 250% is at absolutely nose bleed level. SCI is still walking despite being dead because people expect Temasek to bill it out if need be.
But likely bill out with a highly dilutive rights issue, Temasek style.
naoshingo ( Date: 15-Jan-2021 23:05) Posted:
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Keppel also has a debt of $10b also....and their gearing ratio is higher than SCI....
better ( Date: 15-Jan-2021 22:46) Posted:
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