Sembcorp Marine's 3Q Profit Sinks on Challenging Shipping Environment

Singapore's Sembcorp Marine – the world's second-largest oil rig builder – reported Tuesday a net profit of $94 million (SDG 115.5 million) for the third quarter ended September, down 48 percent from its reported net profit of $182 million (SDG 222.5 million) a year ago. Revenue for the quarter sank 31.5 percent to $729 million (SDG 892.4 million).

The company said in its earnings statement that the market environment for shipping remains challenging.

Sembcorp Marine was however optimistic on offshore exploration and production spending, which the company said will remain "buoyant" with discoveries in frontier areas and around the primary deepwater basins of the US Gulf of Mexico, Brazil, East and West Africa and Nigeria.

The company also noted that there will be continued demand for repair and life extension work for liquefied natural gas carries, as well as repair and upgrading work for offshore vessels.

Maybank Kim Eng said in a research note published Tuesday that it expects Sembcorp Marine's revenue and profit to be "back-end loaded in 4Q 2012 with more initial recognitions of jackup units and its first Sete Brasil drillship contract. "

"We remain optimistic of new order flows given strong market fundamentals and healthy customer enquiries," Maybank Kim Eng added.


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