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Sembmarine first quarter profit falls 28.8%

Singapore’s Sembcorp Marine has posted a 28.8% decrease in first quarter profit on the back of reduced revenue as the shipyard group operated in a challenging market environment.

Net profit for the quarter ended 31 March 2017 was recorded at SGD39.58m ($28.36m), down 28.8% compared to the gain of SGD55.61m in the same period of last year.

The profit drop was attributed mainly to lower contribution from rigbuilding projects, costs incurred for a floater project which is pending finalisation with the customer and higher finance costs.

However the fall in the first quarter profit was cushioned by a non-operating income of SGD46.82m arising from a gain for the group’s divestment of its 30% equity interest in Cosco Shipyard Group completed in January this year.

First quarter revenue fell by 17.2% year-on-year to SGD760.05m due primarily to lower recognition for rigbuilding projects resulting from customers’ delivery deferment requests and lower repair businesses.

As at 31 March 2017, Sembmarine’s net orderbook stood at SGD7.14bn with deliveries and completion stretching until 2020. Excluding the drillships order from Sete Brasil, which has filed for bankruptcy protection, Sembmarine’s orderbook was valued at SGD4.02bn

Sembmarine noted that with oil prices appearing to have stabilised, global exploration and production spending is expected to increase in 2017, compared to the last two years.

“Enquiries for non-drilling solutions continue to be encouraging. We are cautiously optimistic of new orders for production facilities in the next few years,” Sembmarine stated.

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