Sembcorp Marine Profit up on Rig Building

Drilling rig builder Sembcorp Marine Ltd said on Monday its second-quarter net profit rose 5.4 percent from a year earlier, helped by stronger performance from its rig building and fixed platform businesses.

The Singaporean company reported a net profit for the quarter ended on June 30 of S$131.6 million ($105.57 million), which brings the first-half net profit to S$254 million. The mean full-year net profit forecast stood at S$597 million, based on estimates from 24 analysts, Thomson Reuters data showed.

The company reiterated that its wholly-owned new yard in Brazil is due to begin operating in the second half of 2014.

Sembcorp Marine and rival Keppel Corporation Ltd have helped Singapore win the status of the world's top jackup drilling rig producer, though rapid ascent of Chinese yards is threatening the dominance of the Singaporean companies.

The group said while long-term fundamentals driving growth in the offshore oil and gas exploration and production market remain stable, there may be some near-term headwinds.

A slowdown in capital expenditure is expected to limit new orders and rising competition is hurting margins, the company said in a statement.

Sembcorp Marine's revenue for the quarter rose 19 percent to S$1.34 billion due to higher revenue recognition from its rig building projects, though revenue from the ship repair business fell 5 percent due to a slowing shipping market.

(1 US dollar = 1.2466 Singapore dollar)

(Reporting by Rujun Shen and Rachel Armstrong, editing by Louise Heavens)