Sembmarine’s 2Q profit down 51%

Singapore’s offshore rig builder Sembcorp Marine sees signs of offshore market improvement, however it believes its will take longer for a more robust recovery.

The company’s second quarter revenue fell to $655 million, a 28 percent dive compared to $908.5 million in 2Q 2016.

Net profit fell to $5.6 million, down from 51 percent down from $11.5 million a year ago.

The company said its result was affected mainly due to lower contribution from rig building and offshore platform projects and the the impact of foreign currency translation loss on the USD borrowings for the Brazil yard.

Providing the outlook for the industry, Sembcorp Marine has said that global exploration and production spending is expected to increase, but this will not happen instantly

“Offshore day rates appear to have stabilized and utilization levels have begun to improve. However, a more robust recovery will take longer,“ Sembmarine said.

The driller also said that enquiries for non-drilling solutions continue to be encouraging.

“We have been actively involved with our potential customers in developing engineering solutions for the production segment. We remain cautiously optimistic of new orders for production facilities in the next few years,” Sembarine said.

The company has been  working on the development and commercialisation of our Gravifloat technology for near-shore gas infrastructure solutions.

However, Sembmarine said, it will take time for such efforts to translate into orders.

Niche markets in LNG carrier and cruise ship repairs and upgrades have held up well and have relatively outperformed other segments. We expect this trend to continue, Sembcorp said.

The company’s net order book stands at $6.7 billion, with only $75 million in new orders secured in 1H 2017. Worth noting, the orders secured this year are all for non-drilling solutions). Excluding the Sete Brasil drillships, Sembarine’s net order book stands at $3.6 billion.

The company in July delivered Randgrid FSO to Teekay, to be used at the Gina Krog field offshore Norway. The vessel is currently sailing near the coast of South Africa, expected to make a stop in Cape Town on August 1, before continuing its journey to Norway.

Earlier, in May, the FPSO Pioneiro de Libra, also built by Sembmarine for Teekay reached Brazil where it will work for a consortium between Petrobras, Total, Shell, CNPC, and CNOOC for a period of 12 years.

Offshore Energy Today Staff

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