Sembcorp Reports 28 Pct Lower Income in 2012 (Singapore)

Sembcorp Marine recorded a full year net profit of $538 million amid challenging operating environment in 2012. Earnings per share for the Group were 25.8 cents while Return on equity was 22.2%.

Group net profit at $538 million in 2012 was 28% lower as compared with $752 million a year ago. On a quarterly basis, 4Q 2012 net profit at $167 million was 27% lower as compared with $229 million in 2011. Excluding the non-operating items, the Group’s net profit at $500 million was 29% lower as compared with $700 million in 2011 while net profit in 4Q 2012 at $126 million was 29% lower than the $177 million recorded for the corresponding period last year.

Group operating profit in 2012 was $554 million as compared with $737 million in 2011. On a quarter to quarter basis, operating profit in 4Q 2012 was $148 million as compared with $201 million in 2011.

Group turnover for FY2012 was $4,430 million, which was 12% higher as compared with $3,960 million in 2011. Overall, the higher turnover was attributable mainly to higher revenue recognition from offshore platform projects and more rig building projects achieving initial progressive recognition in 4Q 2012 with turnover increasing by 38% from $998 million in 4Q 2011 to $1,378 million in 4Q 2012.

The Group has a net order book of $13.6 billion with completion and deliveries stretching into 2019. This includes $11 billion in contract orders secured in 2012 and a $900 million contract secured since the start of 2013, excluding ship repair contracts. Moving ahead, the Group remains focused on operational efficiency, productivity improvements, safety management and the timely deliveries of these record orders to its customers.

Amid the fragile global economic environment, the long-term industry fundamentals for the Offshore Oil and Gas sector remain sound underpinned by high oil prices and projected increases in offshore exploration and production (E&P) spending. Demand for rigs is expected to remain strong given the ageing rig fleet and the increasing focus by oil companies for new, safer and efficient rigs and rigs capable of operating in harsh environment.

There is continued demand for repair, upgrading and life extension work, in particular in the niche segments of LNG carriers, passenger/cruise vessels and offshore vessels. Demand for the Group’s big docks remains strong as the alliance and long-term customers continue to provide a stable and steady base-load.

The Group continues to receive healthy enquiries for the various segments although competition remains keen with effects on margin.

Press Release, February 21, 2013

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