Singapore's Sembcorp Marine Ltd. achieved a net profit of $412.2 million (SGD 560 million) in 2014, a marginal one percent higher than $409.2 million (SGD 556 million) from the previous year despite challenging market conditions, the company said when releasing its financial results last week.
Annual revenue in 2014 was six percent higher at $4.2 billion (SGD 5.8 billion) compared to 2013's $4 billion (SGD 5.5 billion) due mainly to increased contribution from the firm's rig building activities and offshore platform projects.
Rig building posted a turnover of $2.8 billion (SGD 3.8 billion), up six percent from $2.6 billion (SGD 3.6 billion) as Sembcorp Marine delivered eigh jackups during the year, while another 10 rigs are in the work in progress or planning stage.
The firm's fixed platform segment also recorded a six percent gain in revenue to $680.8 million (SGD 925 million) in 2014 as three major projects were delivered during the year, up from $638.9 million (SGD 868 million) in the previous year. Meanwhile, there was a 28 percent increase in offshore and conversion revenue to $315 million (SGD 428 million) last year from $247.3 million (SGD 336 million), with the gains attributed to delivery of three projects.
In contrast to the rig building and the offshore platform/offshore and conversion segments, Sembcorp Marine reported that its ship repair revenue was hit by a nine percent loss in 2014 to $457.8 million (SGD 622 million) from $501.2 million (SGD 681 million) a year earlier. The firm said the loss was caused by low average revenue per vessel despite an increase in the number of ships repaired by the yard.
Overall, rig building is Sembcorp Marine's largest revenue contributor, providing 65 percent of its total turnover in 2014, while the fixed platform/offshore conversion and ship repair segments accounted for 23 percent and 11 percent, respectively.
The firm has a net order book of $8.4 billion (SGD 11.4 billion) at the end of last year, with deliveries and completion stretching till 2019, down 7.3 percent from $9 billion (SGD 12.3 billion) in 2013. Still, Sembcorp Marine expects to build up its order book despite a challenging market environment.
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