Sembmarine expects losses to continue for FY2021, amid shortage of foreign workers

Sembmarine also announced an existing order book of over $1.89 billion.
Sembmarine also announced an existing order book of over $1.89 billion.PHOTO: LIANHE ZAOBAO

SINGAPORE (THE BUSINESS TIMES) - Mainboard-listed Sembcorp Marine (Sembmarine) said on Monday (May 3) in an interim business update that it expects losses to continue for its current financial year.

The offshore and marine company continues to face Covid-19 supply chain constraints and shortage of skilled workers as foreign workers who left Singapore over the past year have been unable to return due to ongoing border controls in countries such as India and Bangladesh.

The shortage of skilled workers has impacted the execution and schedule completion of some of the group's projects, the group said in a bourse filing.

That being said, there have been no cancellations to date of any existing projects, it said.

The company added it is actively sourcing for skilled workers from other countries and is working with the relevant authorities to expedite their entry into Singapore.

Sembmarine also announced an existing order book of over $1.89 billion, which includes $290 million of ongoing repairs and upgrades for delivery in 2021.

The group is actively tendering for more than 10 projects, especially in the renewable energy and gas solutions segment. A similar number of tenders are in progress for the process solutions segment covering floating production, storage and offloading vessels, floating production units, and floating storage and offloading vessels.

Said the company: "On future orders, the market sentiment has improved although the post-Covid-19 recovery remains uncertain. There are increasing signs of active reviews of FIDs (final investment decisions) and improved orders visibility. However competition for new projects remains intense."

Notwithstanding the challenging operating environment, Sembmarine said its strategic investments have positioned it well for the global transition to a low-carbon economy and pivot towards cleaner and greener energy sources.

Subject to ongoing support from its lenders, the group expects to have the necessary liquidity to fund its operations for the foreseeable future. As at end-March, its net debt to equity was 0.74 times.

Shares of Sembmarine closed at 21 cents on Friday, down 0.5 cent or 2.3 per cent.

∙ With additional information from The Straits Times