Singapore's Sembcorp Marine Ltd.'s net profit rose 2 percent in third quarter of this year (3Q 2014) to $105.5 million (SGD 132 million), compared to $103.9 million (SGD 130 million) a year ago, with the growth attributed to higher contribution from rig building and fixed platform projects, according to financial results released by the firm Wednesday.
Turnover in 3Q 2014 expanded 14 percent to $163.9 million (SGD 205 million), up from $143.9 million (SGD 180 million) in the corresponding period last year. Rig building's revenue contribution grew 8.2 percent from $0.91 billion (SGD 1.14 billion) to $0.98 billion (SGD 1.23 billion), while the offshore & conversion segment recorded 10.6 percent increase to $239.7 million (SGD 299.8 million) but the repair segment posted a 22.8 percent decline to $125.8 million (SGD 157.3 million).
In the nine months to September, revenue for the rig building sector was up 23 percent year on year to $2.3 billion (SGD 2.90 billion), with Sembcorp Marine delivering six jackups during this period, while another 11 are in work in progress or planning and engineering stage. Meanwhile, income from the offshore and conversion/fixed platform segment rose 8 percent to $765.4 million (SGD 957 million), while ship repair revenue fell 10 percent to $371.9 million (SGD 465 million) due to timing in recognition of repair projects.
Sembcorp Marine currently has a net order book of $10 billion (SGD 12.6 billion) with completion and deliveries stretching into 2019. The amount includes a total of $3.3 billion (SGD 4.2 billion) in new rig and offshore conversion contracts secured since the beginning of this year, but excludes repair and upgrade contracts.
The company believes that the long term fundamentals driving the offshore exploration and production market remains stable despite the fall in crude oil prices since early September.
"The Group continues to receive enquiries for high specification, harsh environment jackups and next generation deepwater and ultra-deepwater floaters. However reduction in capex spending could impact new orders and keen competition continues to exert pressure on margins," Sembcorp Marine said.
Over in Brazil, Sembcorp Marine’s wholly owned shipyard Estaleiro Jurong Aracruz has commenced initial operations in the second half of this year, with construction completion scheduled for 2015.
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