Conglomerate Sembcorp Industries' earnings hit headwinds in the first quarter, but its utility operations overseas helped to offset lower profits in Singapore.
Net profit plunged 24.7 per cent to $107 million from the same period last year as turnover tumbled 18.9 per cent to $1.9 billion.
Hit by challenges in the marine sector, its rig-building segment suffered the most among its business segments, with net profit diving 48 per cent to $33.5 million.
Listed subsidiary Sembcorp Marine had reported a halving of its first-quarter earnings, hit by slumping oil prices and the bankruptcy filing of its client, Sete Brasil. It had seven drillships worth US$7 billion (S$9.5 billion) for Sete Brasil on its order books.
On the other hand, net profit in utilities rose 1 per cent to $75.2 million.
However, its business in utilities in Singapore suffered. Net profit for its energy operations here fell 35 per cent to $7.9 million, which the firm attributed to intense competition.
AT A GLANCE
REVENUE: $1.9 billion (-18.9%)
NET PROFIT: $107 million (-24.7%)
EARNINGS PER SHARE: 5.5 cents (-30.4%)
This was offset by the company's overseas utilities, which saw net profit grow 12 per cent. Its utility business in China recorded 29 per cent net profit growth from a year earlier.
The company expects more growth in India this year, citing its recently completed Thermal Powertech Corporation India (TPCIL) power plant in India, which will give a full year's contribution.
Sembcorp had announced on Tuesday that it would increase its shareholdings in TPCIL from 67.4 per cent to 86.9 per cent.
But analysts were concerned that one unit of the TPCIL plant had been shut down at the start of April.
Mr Tang Kin Fei, group president and chief executive, said the shutdown was due to a technical fault and that it would begin operations by the second half of this month.
The firm is betting on its overseas utility projects to generate revenue. The projects include Sembcorp Gayatri Power plant in India, which will be completed by the end of this year. The Chongqing Songzao project will be completed next year.
Mr Tang said he expected the Singapore power market to continue to be challenging this year, but maintained that the company will put in a better performance.
"There are many projects which we expect to complete by the end of this year, and they will add to our revenue stream. We will continue to perform well into 2017," he said.
Earnings per share came in at 5.5 cents, down from 7.8 cents for the same period last year.
Net asset value per share was $3.60 as at March 31, unchanged from Dec 31.
The company's shares fell 2.48 per cent to $2.75 yesterday.