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Sembmarine sinks to Q3 loss, challenges persist

Singapore’s Sembcorp Marine (Sembmarine) sank to a loss in the third quarter due to the continued low overall business volume, as challenges in the offshore and marine sector have persisted.

Loss for the quarter ended 30 September 2018 was recorded at SGD29.76m ($21.54m), as against the profit of SGD100.72m in the same period of last year.

The quarterly revenue came up to SGD1.17bn compared to SGD728.77m in the previous corresponding period. The higher revenue was due to higher percentage recognition of two Transocean drillships, as well as recognition of two additional jack-up rigs delivered to Borr Drillling.

Wong Weng Sun, president and ceo of Sembmarine, commented: “As we had earlier guided in our results briefing in 2Q 2018, work volume for the foreseeable quarters, while improving, is expected to remain low, and the trend of negative operating profit will continue for the current financial year.”

Sembmarine maintained that its cash resources remain sufficient for the group to prudently manage and to align them with business volume and potential opportunities.

“While offshore drilling activities have shown initial signs of improvement, offshore rig orders will take some time to recover as the market remains oversupplied,” Wong said.

“Competition in the repairs and upgrades segment remains intense. The segment will be underpinned by regulations that require ballast water treatment systems and gas scrubbers to be installed over the next two to five years,” he added.

As at 30 September 2018, Sembmarine’s orderbook was registered at SGD6.39bn, with completion and deliveries till 2021. The group also secured SGD730m in new contracts over the first nine months.

“To grow our orderbook, we are proactively pursuing leads, responding to enquiries and tendering for projects in the floaters, production platforms, gas solutions and specialised shipbuilding segments,” Wong said.

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