Sembcorp Marine's 1H 2014 Net Profit Up 4%, Lifted by Rig, Platform Sectors

Sembcorp Marine Ltd. recorded a net profit of $203.15 million (SGD 254 million) in the first half of this year (1H 2014), 4 percent higher than the $195.15 million (SGD 244 million) posted a year ago, while revenue grew 23 percent to $2.14 billion (SGD 2.68 billion) from $1.74 billion (SGD 2.17 billion) amid greater contribution from the rig building and from offshore platform segments, according to financial results released the company Monday.

Rig building contributed $1.33 billion (SGD 1.67 billion) during this period, up 36 percent on year from $0.98 billion (SGD 1.226 billion). Six jackups were delivered by the company, while construction of another eight jackups are in progress. The fixed platform segment posted a 30 percent rise in revenue to $427.89 million (SGD 535 million) in 1H 2014 compared to $330.31 million (SGD 413 million) last year as two major project deliveries took place in the second quarter.

Meanwhile, Sembcorp Marine reported that revenue from the offshore and conversion  segments fell 40 percent from $164.76 million (SGD 206 million) in 1H 2013 to $98.38 million (SGD 123 million) in 1H 2014, with only one project delivery during this period. Turnover from ship repair was also lower, down 2 percent at $245.54 million (SGD 307 million) in 1H 2014 from $251.14 million (SGD 314 million) last year.

Sembcorp Marine's net order book stood at $10.16 billion (SGD 12.7 billion), with completion and deliveries stetching into 2019. The sum included $2 billion (SGD 2.5 billion) in new rig building and offshore conversion contracts secured since the beginning of this year, but excludes repair and upgrade contracts.

Going forward, Sembcorp Marine sees long term fundamentals driving the offshore exploration and production market remaining stable although a slowdown in capital expenditure (capex) may affect new orders and stiffer competition continues to weigh on margins. 

"The strong underlying trend toward high specification, harsh environment jackup drilling units and deepwater and ultra-deepwater floaters is expected to drive offshore capex spend, and the Group is well positioned to benefit given its broad product offering and strong execution track record," the company said in a press release.

Meanwhile, construction of Estaleiro Jurong Aracruz -- Sembcorp Marine's wholly owned shipyard in Brazil -- is on schedule to commence initial operations in 2H 2014 and completion is expected next year.


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