Sembmarine Q1 net profit plunges 86% on absence of one-off gain

THE absence of one-off gains eroded results for Sembcorp Marine (Sembmarine) in its first quarter, despite revenue increasing by some 60 per cent.

Net profit plunged 85.7 per cent to S$5.3 million from the previous year, the group said in a Singapore Exchange filing on Wednesday evening.

This was mainly due to the one-off gain on disposal of Cosco Shipyard Co Ltd which the group recorded in the first quarter of last year.

Sembmarine also recorded lower contributions from offshore platforms, though this was offset by higher profit recognition on rigs delivery.

For the three months ended March 31, revenue shot up 58.3 per cent to S$1.18 billion from the previous year.

This was thanks to higher revenue recognition for rigs and floaters upon the delivery of two jack-up rigs to Borr Drilling, and a jack-up rig to BOTL, said Sembmarine.

Earnings per share sank to 0.25 Singapore cents from 1.77 Singapore cents in the year-ago period.

Sembmarine president and chief executive Wong Weng Sun said that while overall sentiment and capital expenditure in the offshore oilfield exploration sector have begun to improve, it will take time for this to translate into new orders.

The group secured new orders worth S$476 million in the first quarter, bringing its total orderbook to S$7.71 billion as at end-March.

"Margins remain compressed with intensifying competition," he said at a briefing. "Based on existing orders, overall business volume and activity is expected to remain low, and the trend of negative operating profit may continue."

The group continues to actively manage its costs to align with business volumes, and also manages its cashflows through securing projects with milestone progress payments, he added.