Sembmarine expects H1 2021 losses to be in the region of losses incurred for FY2020

S51 estimates losses for the six months ended June 30, 2021, to likely be in the region of the full-year losses incurred for FY2020, according to a profit guidance on Monday.

This comes as the offshore and marine player expect to incur additional costs arising from delays in project execution as a result of the pandemic. These additional costs are due to work rescheduling, extra sub-contract work, additional material usage and other staff turnover-related costs.

Thus, provisions will be made for the group's H1 2021 results for the costs to be incurred to complete the projects over the next six to 18 months.

"These provisions will have a material adverse impact on the group's H1 2021 results," Sembmarine added. Its results for the period are scheduled for release on July 29.

The group further guided that labour shortages, together with supply chain constraints, have resulted in further delays in the completion of these projects. On top of increased manpower and other related costs, revenue receipts were also significantly impacted. The group said it will make full provisions for these increased costs in its H1 2021 results.

Sembmarine on June 24 proposed an additional S$1.5 billion rights issue to shore up its financial position and accelerate its pivot towards clean energy. It also said it had inked a memorandum of understanding with Keppel Corp to explore a potential merger of Sembmarine and Keppel Offshore & Marine.

Shares of Sembmarine closed 1.6 per cent or 0.2 Singapore cent lower at 12.1 cents on Monday.

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