Sembcorp Marine’s 4Q 2015 hit by impairments

Sembcorp Marine, a Singapore-based offshore rig builder, posted a loss of $537 million for the fourth quarter of 2015, down from $174 million profit in the fourth quarter of 2014.

The company’s profit was affected by impairment and provisions of $609 million for Sete Brasil projects and other rig projects, plus its share of losses from associates and joint ventures 4Q 2015.

Adjusted for the above mentioned items, 4Q 2015 net profit was $99 million. The 4Q turnover was $1.33 billion, compared to 1.44 billion in the fourth quarter of 2015.

The company said its result was affected by the lower revenue recognition from rig building in the quarter. Contributions from offshore platforms and repairs & upgrades businesses were higher.

For the full year, the company posted a net loss of $290 million, dragged down by $609 million in impairment and provisions for rigs including $329 million for Sete Brasil projects and $192 million for associate/joint venture losses.

During the year Sembcorp Marine secured S$3.2 billion in new orders, and the company’s net order book backlog as at December 31, 2015 stands at $10.4 billion.

“Looking ahead, Looking ahead, this downcycle is expected to be more protracted than previous cycles. Sembcorp Marine believes that it is sufficiently prepared, not just to ride through the storm, but to lay stronger foundations for the future when the market recovers. The Group will continue to actively manage our balance sheet to maintain a healthy financial position. The Group remains optimistic on the longer term prospects of its business as its facilities have been built to cater to the industry’s demand for the long term. As an integrated Sembcorp Marine, we will optimise our capabilities and capacities, as well as increase our efficiency and productivity to better serve our partners and customer,” Sembcorp Marine said.

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