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Sembcorp Marine sees slight increase in Q2 profit

Sembcorp Marine sees slight increase in Q2 profit
Singapore’s Sembcorp Marine posted a slight improvement in its second quarter results as revenue rose on contributions from rig and platform building jobs.

Net profit in the second quarter increased to SGD132m ($106m), rising 5% from SGD125m in the same period of last year.

Revenue improved by 19% year-on-year to SGD1.34bn due mainly to higher earnings from rig building activities and from offshore platform projects.

In the first half of 2014, Singapore-listed Sembcorp Marine registered profit of SGD254m and revenue of SGD2.68bn.

Sembcorp Marine’s rig building arm saw first half turnover jumped 36% year-on-year to SGD1.67bn. The group delivered six jack-up rigs in the first half, with another eight in the work in progress stage.

“Long term fundamentals driving the offshore E&P market remain stable. However, slow down in capital expenditure may impact new orders and keen competition continues to exert pressure on margins,” Sembcorp Marine said.

“The strong underlying trend toward high-specification, harsh environment jack-up drilling units and deepwater and ultra-deepwater floaters is expected to drive offshore capex spend,” it said.

In its repair business, Sembcorp Marine expects to continue to increase its market share. “However, despite the larger number of vessels, the average revenue per ship remained low in view of market conditions,” it said.

To date, the group has a net orderbook of SGD12.7bn with completion and deliveries stretching into 2019. This includes a total of SGD2.5bn in new rig and offshore conversion contracts secured since the start of 2014, but excludes repair and upgrade contracts.