Forex gains and tax credit pull SembMarine back into the black

FOREIGN exchange gains and a tax credit gave a lift to results for Sembcorp Marine (SembMarine) in its third quarter, despite a drop in revenue.

It made a net profit of S$2.7 million, a reversal from a net loss of S$21.8 million in the previous year, the group said in an exchange filing on Tuesday evening. Earnings per share came in at 0.13 Singapore cent, up from a loss per share of 1.04 Singapore cents in the year-ago period.

For the three months ended Sept 30, revenue plunged 64.3 per cent to S$316.9 million from the year-ago period. The drop in revenue was due to lower rig building revenue, fewer floater and offshore platforms projects, and revenue reversal for two jack-up rigs which were terminated with a customer during the quarter, said the group.

SembMarine recorded a foreign exchange gain of S$31.3 million in the quarter, compared with a loss of S$18.9 million in the preceding year, due to the revaluation of liabilities denominated in US dollars to Brazilian reais.

Global exploration and production spending continues to show signs of improvement, the group said in its results statement.

"Recent stabilisation of drilling rigs' day rates and utilisation levels, coupled with increased activities in secondary rigs sales, indicate a commencement of recovery in the drilling segment."