Lower rig margins drag down profits at Sembcorp Marine

FOURTH quarter earnings at Sembcorp Marine fell 27 per cent to $167.1 million owing to lower margins from new design rigs.

This was despite a 38.1 per cent jump in revenue to $1.38 billion, which had been thanks to higher revenue recognition for rig building and offshore platform projects.

Earnings per share for the quarter were eight cents, down from 10.99 cents a year ago.

Net asset value per share was $1.17 at Dec 31, up from $1.16 a year earlier.

It was the same story for the full-year numbers, which saw net profit falling 28.4 per cent to $538.5 million.

SembMarine, the world's second largest oil rig builder, also blamed the lower margin from new design rigs for the lower full year profit.

The previous year's earnings had also been boosted by the resumption of margin recognition on the completion and delivery of the Songa Eclipse semi-submersible rig.

The profit was lower than the $548.5 million average estimate of a Bloomberg poll of analysts.

Full year revenue however rose 11.9 per cent to $4.43 billion.

Earnings per share for the 12 months were 25.81 cents, down from 36.13 cents in 2011.

SembMarine proposed a final dividend of six cents per share, plus a special dividend of two cents, to give a total of eight cents. SembMarine had earlier paid an interim dividend of five cents so the full-year payout is 13 cents per share.