Sembcorp Industries net profit down 55.9% as revenue falls

A bulk cargo ship, foreground, and other vessels undergo repairs at Sembcorp Marine Ltd's Sembawang Shipyard drydocks in Singapore on Feb 24, 2010.
A bulk cargo ship, foreground, and other vessels undergo repairs at Sembcorp Marine Ltd's Sembawang Shipyard drydocks in Singapore on Feb 24, 2010. PHOTO: BLOOMBERG/MUNSHI AHMED

SINGAPORE - Sembcorp Industries said net profit for the third quarter fell 55.9 per cent to $53.9 million from the same period a year ago.

Turnover dropped 10.8 per cent from the same period a year ago to $2.1 billion, as revenue from its marine, urban development and other/corporate businesses fell.

Its utilities business, however, chalked up a 3 per cent gain in turnover year on year, due to higher turnover from India and recognition of construction revenue for a project in Myanmar.

The marine business saw turnover fall 21 per cent from a year ago, mainly due to lower revenue recognition for rig building projects resulting from customers' delivery deferment requests and lower repair businesses.

Chief executive officer Tang Kin Fei said Sembcorp's diversified portfolio gives it strength and resilience as a group.

"Our utilities business delivered a healthy performance in the first nine months of 2016. The business' net profit was up 11 per cent, excluding divestment gains recorded the previous year. Overseas utilities operations delivered a 20 per cent net profit growth."

However, the Singapore utilities business continues to face intense competition in the power market, Sembcorp said.

The global oil and gas industry remains subdued and uncertain, it added.

Receipts from project deliveries and achievements of progress milestones have improved Sembcorp Marine's cash flow and balance sheet during the quarter. The business will continue to focus on liquidity, costs and balance sheet management.

This includes active management of its manpower requirements in line with changing needs.

"Sembcorp Marine expects to navigate these tough times, having gone through several down-cycles in the past. With a strong core team and strategic investments in infrastructure and technology built over the years, the business is more resilient and better positioned to capture new opportunities."