Sembcorp Marine Ltd. posted a net profit of $105 million (SGD 122 million) in the first quarter of 2014 (1Q 2014), up 3 percent from $102.46 million (SGD 119 million) in the previous year, while revenue rose 27 percent in the corresponding period to $1.15 billion (SGD 1.34 billion) amid higher contribution from rig building activities and offshore platform projects, the company said in an announcement Friday.
The rig building business grew 33 percent from a year ago to reach $685.36 million (SGD 796 million) in 1Q 2014 and it accounted for 60 percent of Sembcorp Marine's total revenue during this period, 3 percent more than last year. Revenue gained by the offshore and conversion sector, which provided 27 percent of the firm's total turnover in 1Q 2014, climbed 24 percent to $311.68 million (SGD 362 million). Ship repair, which contributed 12 percent of the company's revenue in 1Q 2014, registered a one percent growth to $136.03 million (SGD 158 million).
Sembcorp Marine secured $1.40 billion (SGD 1.63 billion) worth of contracts, excluding those for repair and upgrade, as of May 2, including orders for two drillships from Transocean, while its net order book stood at $11.11 billion (SGD 12.9 billion) with deliveries and completion stretching till 2019.
"The Transocean contract to build two Jurong Espadon III, our proprietary design drillship, is a strong endorsement of the Group’s strategy to deepen, broaden and strengthen our product offering to capture this growing market segment. In a competitive industry landscape, the Group will focus on operational efficiency, productivity improvements, safety management and the timely delivery of orders to our customers," Sembcorp Marine said in a press release.
Meanwhile, construction of the Estaleiro Jurong Aracruz, Sembcorp Marine’s wholly owned shipyard in Brazil, continues to progress well and remains on track to commence initial operations in 2H 2014, with completion planned for 2015.
Looking ahead, Sembcorp Marine noted that long term fundamentals driving the offshore exploration and production market remain stable, underpinned by firm oil prices. However, the company added that "while enquiry levels remain healthy, competition is keen and intense, exerting pressure on margins."
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