In its full year results announcement Sembmarine revealed the group is continuing with its transformation and yard consolidation strategy as it will move all operations from its Tanjong Kling yard by end-2019, four years ahead of schedule. The Tanjong Kling yard was previously known as Jurong Shipyard.
After Sembmarine has consolidated its operations at its integrated Tuas Boulevard Yard, the group is expected to realise cost savings estimated at SGD48m per annum from its financial year 2020.
Speaking about the market Wong Weng Sun, president and ceo of Sembmarine, of noted that offshore rigs utilisation and day rates for most segments have continued to stabilise or improve, underpinned by more drilling activities. Offshore capex spending has also continued to improve with more production projects moving towards final investment decision stage.
“While offshore drilling activities have increased, offshore rig orders will take some time to recover as the market remains oversupplied,” Wong said.
“The ship repairs and upgrades segment remains intensely competitive although the market is expected to improve with higher work volume from the new IMO regulations requiring the installation of ballast water treatment systems and gas scrubbers,” he said.
In 2018, Singapore-listed Sembmarine suffered a full year loss of SGD74.13m ($54.85m) as opposed to a profit of SGD260.18m in 2017.
Revenue was higher at SGD4.89bn compared to SGD3.03bn in 2017, due largely to revenue recognition on delivery of eight jack-up rigs and the sale of a semi-submersible rig.
Last year, Sembmarine secured SGD1.18bn in new orders, bringing its net orderbook to SGD6.21bn. Excluding the Sete Brasil drillships, net orderbook stands at SGD3.09bn.
The SGD1.18bn worth of new orders include two renewable energy engineering solutions projects, construction and engineering of hull, topsides and living quarters for a semi-submersible FPU and a FPSO vessel, and retrofitting of ballast water treatment systems and gas scrubbers for 58 vessels.
“While the overall industry outlook continues to improve, significant time and effort for project co-development with potential customers are required before new orders are secured, and competition remains intense,” Wong said.
He added that while the group’s overall business volume and activity are stabilising, they are expected to remain relatively low.
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