SembMarine expects losses to continue in Q4

Sembcorp Marine (SembMarine) continued to incur losses for its fiscal third quarter ending Sept 30, with low overall business volume and execution delays, it said yesterday in a business update.

SembMarine "expects losses to continue into the fourth quarter", the group added in the exchange filing. It did not provide details on the level of losses incurred in the third quarter or expected for the fourth quarter.

In July, SembMarine had reported a net loss of $192.1 million for the first half of this year.

In its business update, SembMarine said its Singapore yards began to resume production activities in early July, following the relaxation of Covid-19 measures. Its operating yard workforce, including sub-contractors, has since increased to almost full workforce levels.

It added: "With oil prices recovering since the March collapse, there have been active reviews of deferred projects by the oil companies.

"New orders visibility has improved as a result, and the group is increasingly active in bidding for new projects and discussing resumption of delayed projects."

The group is actively tendering for more than 10 projects, especially in the greener energy market segments such as renewable energy and gas solutions. It added that a similar number of tenders are also in progress for the process solutions segment.

SembMarine said it is executing a total of $1.78 billion of significant projects. Its repairs and upgrades business is also undertaking about $330 million of ongoing jobs and new orders secured during the quarter.

Delivery dates for most of its existing projects have been rescheduled by between three and 12 months, but there has been no cancellation of any existing project to date, SembMarine noted.

It said the completion of the group's $2.1 billion rights issue has strengthened its liquidity position and balance sheet. It is now focused on executing its projects and securing new orders.

"We will work to manage our costs and liquidity prudently to ensure we are able to sustain our operations and ride through the severe industry downturn and Covid-19 pandemic," SembMarine said.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on November 12, 2020, with the headline 'SembMarine expects losses to continue in Q4'. Subscribe