Sembcorp Marine axes 8,000 jobs. Sinks to red in 3Q
- Business & Finance
Singapore’s offshore rig builder Sembcorp Marine, also known as SembMarine, went from black to red during the third quarter of 2016 and reduced its workforce by 8,000.
The company on Tuesday posted a net loss of S$21.8 million for the third quarter of 2016, compared to a profit of S$32.1 million in 3Q 2015.
SembMarine explained that this result was mainly due to higher finance costs of S$22.5 million and share of losses of associates and joint ventures of S$27.7 million for the quarter.
Further, SembMarine’s revenues for 3Q 2016 were S$888 million, a 21% drop when compared to revenues of S$1.13 billion for the same period in 2015.
In his results briefing speech, Sembcorp Marine President and CEO Wong Weng Sun said the company reallocated excess manpower from drilling to non-drilling work and terminated “less efficient sub-contractors”. He also said the company has taken steps to reduce its manpower level at the EJA yard in Brazil to correspond to the level of activities.
These measures have resulted in a reduction of about 8,000, comprising employees and sub-contractors manpower. Weng Sun added the company would continue to evaluate and optimize its manpower requirements.
In addition to job cuts, the company has taken measures to reduce operating costs by implementing salary freeze and adjustments to the variable remuneration components for management staff since 2015.
Looking ahead, the company said the outlook of the oil & gas sector was uncertain and recovery expected to be long drawn and while offshore exploration and production projects continue to be curtailed the company looks to LNG value chain for some prospects.
Offshore Energy Today Staff