Sembmarine's Q3 profit rises 1.8% to S$132m

Singapore

RIG-BUILDER Sembcorp Marine reported a 1.8 per cent increase in net profit to S$132 million for the third quarter ended Sept 30 on the back of higher profit contribution from rig-building and fixed-platform segments.

Turnover rose 3.2 per cent to S$1.71 billion due to increased contribution from the group's rig-building activities and from offshore-platform projects. Earnings per share for the quarter worked out to 6.32 Singapore cents, up from 6.21 cents in the corresponding quarter a year earlier.

During the quarter under review, Sembmarine's rig-building business - which accounts for the biggest share of turnover - reported an 8.2 per cent increase in revenue to S$1.24 billion while its offshore and conversion business saw a 10.6 per cent rise to S$299.8 million. Meanwhile, its repair business reported a 22.8 per cent slump to S$157.3 million.

Gross profit increased 13.7 per cent to S$204.52 million, although operating profit was just 2.8 per cent higher at S$171.36 million, partly due to higher other operating expenses.

For the nine months ended Sept 30, net profit edged up 3.4 per cent to S$386.08 million, while revenue jumped 14.5 per cent to S$4.39 billion.

The group has a net order book of S$12.6 billion, with completion and deliveries stretching into 2019. This includes S$4.2 billion in new rig and offshore conversion contracts but excludes repair and upgrade contracts.

"Despite the current low oil price environment, the group believes long-term fundamentals driving the offshore exploration and production (E&P) market remain stable," it said. "The group continues to receive enquiries for high specification, harsh environment jack-up drilling units and next-generation deepwater and ultra-deepwater floaters. However, reduction in capex spending could impact new orders and keen competition continues to exert pressure on margins."

Sembmarine's wholly owned shipyard in Brazil, Estaleiro Jurong Aracruz, commenced initial operations in H2 2014, with construction completion slated for next year.

The counter closed at S$3.68 on Wednesday, up three cents.