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Sembcorp Marine warns of further delays due to Covid restrictions

Photo: Sembcorp Marine Sembmarine_Tuas Boulevardweb.jpg
Sembcorp Marine (Sembmarine) expects further delays to five projects currently underway in its yards as it continues to struggle with Covid-19 related restrictions and challenges.

The Singapore-listed shipyard group said in a Q3 business update said that while it had made some progress in managing delays in project completions Covid-19 related measures were continuing to serious impact on its performance.

Singapore border closures with labour supply nations have made recruitment of new workers difficult, meanwhile the yard group said it was suffering from attrition of skilled workers, as well as stop work orders resulting from measures to stop recent spikes in infections.

Supplies have also been hit by border delays and equipment delivery impacted by supply chain constraints.

It said these issues had further delays and increased projected costs to complete projects over the next three to nine months. “Of the 16 projects under execution by the group, five projects have been further delayed by between one and three months,” Sembmarine said.

The company said it expected to incur further cost overruns as a result and said it was in negotiations with counterparties to try and reduce the overruns.

Of the 16 projects Sembmarine has under construction two are expected to be delivered this year, 12 in 2022, and the remaining two progressively through to 2025.

As of the end of Q3 2021 the group’s orderbook stood at SGD1.42bn, including SGD0.18bn of ongoing repairs and upgrades for delivery by 2022.

Repair works underway at present include an LNG major reliquefaction plant installation project on Magdala, and restoration works for container vessel MSC Messina and bulk carrier Galapagos.

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