Sembcorp posts 10% fall in Q4 profit as marine unit drags; to pay out 2 Singapore cents/share

SEMBCORP Industries posted a 10 per cent fall in net profit for the fiscal fourth-quarter from a year ago, dragged by the marine business, the company said on Thursday.

Net profit for the three months ended Dec 31, 2018 stood at S$106 million, compared with a restated net profit of S$118 million posted the same period a year ago. The results translate to earnings per share of 5.42 Singapore cents, against earnings per share of 5.96 Singapore cents a year earlier.

A final dividend of two Singapore cents per ordinary share was proposed.

Turnover rose 7 per cent to S$2.57 billion, although gross profit fell 31 per cent as the rise in cost of sales outpaced that of the rise in revenue.

The lower gross profit for the fourth quarter of 2018 was attributed to the marine business, mainly due to continued low overall business volume that impacted the absorption of overhead costs, though offset in part by margin from newly secured production floater projects and delivery of rigs. In the year-ago quarter, the marine segment also recorded the net positive effects of contract termination of three rigs, which mainly arose from the entitlement to the down payments on termination of these rig contracts, said Sembcorp.

For full-year 2018, net profit fell 9 per cent to S$347 million. Sembcorp said for the full year, the marine business recorded a net loss of S$48 million. Excluding the marine business, the group delivered profit growth of 75 per cent.

In a press statement, Neil McGregor, CEO of Sembcorp Industries, said: "In 2018, we made progress in repositioning Sembcorp to be successful and sustainable in a rapidly changing world. We took actions to reshape and equip the organisation with the right capabilities for the future, while working to strengthen our performance and balance sheet.

"Our strategic initiatives will take time to bear fruit, especially given the prolonged offshore and marine downturn. However, as seen from our FY2018 results, our multi-business strategy provides resilience to the group. By leveraging our strengths and embracing change, I am confident that the actions we are taking will put us in good stead as an integrated energy and urban company of the future."

Shares of Sembcorp Industries closed at S$2.66 on Wednesday, up S$0.09.