Singapore’s Sembcorp Marine (Sembmarine) achieved a 2% year-on-year increase in net profit from $130 million to $132 million for the three months ended September 30, 2014 despite a challenging macro environment, the company said.
Group turnover for the third quarter of 2014 grew 3% year-on-year to $1.71 billion, which compares with $1.66 billion for the corresponding period in 2013. The higher revenue came mainly from increased contribution from the Group’s rig building activities and from offshore platform projects.
Gross profit for the three months grew 14% to $205 million from $180 million previously, EBITDA (earnings before interest, tax and depreciation) rose 3% to $200 million while operating profit increased 3% to $171 million.
For the nine months to September 2014, Group net profit increased 3% to $386 million from $373 million with Group turnover rising 14% to $4.39 billion. Group gross profit increased 19% to $569 million, while EBITDA grew 5% year-on-year to $558 million, while operating profit grew 4% to $475 million.
Turnover for the Rig building sector increased 23% year on year from $2,367 million to $2,905 million for the nine months to September. The Group delivered six jack-up rigs for the nine month period, with another eleven in the work in progress or planning and engineering stage.
Offshore and conversion/ fixed platform revenue declined 29% from $283 million in 9M 2013 to $202 million in 9M 2014, while ship repair revenue was 10% lower at $465 million in 9M 2014 compared with $518 million in the corresponding period in 2013 due to timing in recognition of repair projects.
3Q 2014 versus 3Q 2013
On a quarterly basis, Group turnover for 3Q 2014 at $1,712 million was 3% higher as compared with $1,659 million for the same period in 2013.
Group gross profit of $205 million was 14% higher on year-on-year basis while operating profit was 3% higher at $171 million, mainly due to foreign exchange differences.
Group pre-tax profit was 1% higher at $172 million impacted by lower associate and joint venture contributions and higher finance expenses.
Net profit in 3Q 2014 grew 2% year-on-year to $132 million compared with $130 million in 3Q 2013, largely due to higher profit contribution from the Group’s rig building and fixed platform segments.
The Group has a net order book of $12.6 billion with completion and deliveries stretching into 2019. This includes a total of $4.2 billion in new rig and offshore conversion contracts secured since the start of 2014, but excludes repair and upgrade contracts.
According to the company, despite the current low oil price environment, the Group believes long-term fundamentals driving the offshore exploration and production (E&P) market remain stable. Sembmarine says that the Group continues to receive enquiries for high specification, harsh environment jack-up drilling units and next generation deepwater and ultra-deepwater floaters. However, reduction in capex spending could impact new orders and keen competition continues to exert pressure on margins, Sembmarine explains.
Sembcorp Marine’s wholly owned shipyard in Brazil, Estaleiro Jurong Aracruz, started initial operations in 2H 2014, with construction completion scheduled for 2015.