Sembcorp Marine sinks to the red amid low activity levels

Singapore’s offshore rig builder Sembcorp Marine posted a bigger loss for 2019 when compared to 2018. Quarterly, the company went from black to the red as its revenues dropped by 32% amid low activity levels. 

Source: Sembcorp Marine

Sembcorp Marine on Thursday posted a net loss of S$137 million for the 12 months ended December 31, 2019, compared with the net loss of S$74 million for FY 2018.

This was due mainly to the accelerated depreciation for the Tanjong Kling Yard of S$48 million and continued low overall business volume, the company explained. It was partly offset by profits from the repairs and upgrades business, which rose on improved margins and better product mix.

Group revenue for FY 2019 totaled S$2.88 billion, compared with S$4.89 billion booked in FY 2018.

For the fourth quarter 2019 SembMarine recorded a net loss of S$78 million compared to a profit of S$6 million in 4Q 2018.

The company’s revenues in 4Q 2019 were S$624 million, a 32% decrease compared to revenues of S$913 million in 4Q 2018.

The higher revenue in 4Q 2018 had been due to revenue recognition on delivery of a jack-up rig as well as revenue recognition of the Heerema semi-submersible crane project which was delivered in July 2019.

According to the company, business activity levels remain low for all segments except for repairs and upgrades, which continues to improve, underpinned by IMO regulations that require installation of ballast water treatment systems and gas scrubbers.

Challenges remain, in particular supply chain disruptions due to the COVID-19 virus outbreak, which could affect execution of projects. Competition remains intense for all segments of business and the company expects the trend of losses to continue into 2020, SembMarine concluded.

Offshore Energy Today Staff

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