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SembMarine sinks into the red in Q4 on lower business volumes

SEMBCORP Marine (SembMarine) sank into the red in the fourth quarter with a net loss of S$33.78 million, reversing from a net profit of S$34.29 million in the corresponding period a year earlier.

This came on the back of lower business volumes, especially in rigs and floaters and offshore platforms, the company said. This impacted the absorption of overhead costs. Also, there were additional cost accruals made in the quarter for floater projects, which are pending finalisation with customers.

Turnover for the three months ended Dec 31 fell 21.1 per cent to S$655 million, mainly due to lower revenue recognition for rigs and floaters and offshore platform projects.

Excluding the effects of the sale of nine jack-up rigs to Borr Drilling and the termination of three jack-up rigs with a customer, turnover would have decreased by 33 per cent, the company said in its Singapore Exchange filing.

Loss per share for the quarter came in at 1.62 cents, from earnings per share of 1.64 cents a year earlier.

Net asset value per share was 118.69 cents as at Dec 31.

The board is recommending a final ordinary dividend of one cent per share. This brings the total dividend for the 2017 financial year to two cents, from 2.5 cents previously.

At the company's results briefing, president and chief executive Wong Weng Sun said that its investigation into allegations of illegal payments in connection with contracts entered into in Brazil by certain subsidiaries is "ongoing and remains legally privileged".

The company is not aware of any of its employees being implicated by any authorities, Mr Wong added.

He noted that a Guilherme Esteves de Jesus has been charged with various offences by the Brazilian authorities in connection with the allegations. These charges are connected to drillship construction contracts entered into by the company's subsidiaries.

Mr de Jesus is defending the charges against him, said Mr Wong.

The date of the court hearing of the charges against Mr de Jesus is not yet known.

Mr Wong added that the company will continue to monitor developments in Brazil and other jurisdictions.