Low oil prices and muted sentiment in the industry continued to take a toll on Sembcorp Marine's second-quarter earnings.
The rigbuilder has announced that net profit for the three months ended June 30 sank 17 per cent to to $79.58 million (SGD 109 million), compared to $96.37 million (SGD 132 million) a year ago.
Turnover dipped 10 percent during this period to $882.0 million (SGD 1.208 billion) compared to $979.10 million (SGD 1.341 billion) in 2Q 2014. But this was offset by higher contribution from offshore and conversion projects as well as its ship-repair business.
"The persistently low oil prices have
escalated the ongoing cuts in global exploration and production capital expenditure. Some customers are deferring or seeking to defer the delivery of their ordered rigs on a lack of charter contracts," Sembcorp Marine said in the announcement.
“For repair the demand for the dock space is actually very strong,” PK Ong, coo of Sembmarine said at its half year results briefing on Wednesday. “Our big dock is fully booked into next year already.”
Sembcorp Marine also admitted that some customers are putting off or seeking to delay the delivery of ordered rigs due to the lack of charter contracts.
"While the new order outlook for offshore exploration vessels remains bleak - particularly in the jack-up segment, which is in an oversupply situation - the group has benefited from its strategy to diversify its product offering in addition to drilling solutions," said the company.
The group’s new yard, Sembcorp Marine Tuas Boulevard, has what the company says is the longest and deepest repair dock in Asia with a length of 412 m.
Turnover for the Rig building sector declined 18% year on year from $1.67 billion to $1.38 billion in the six month period. The Group delivered the Helix semi-submersible Q5000, the Prosafe accommodation semi-submersible as well as one Hakuryu jack-up rig during the six months, with another 16 rigs in the work-in-progress stage.
SembCorp Marine is a global leader in the offshore and marine industry. It has three main business segments: rig building, offshore & conversion and repair. It is also majority-owned by SembCorp Industries Limited