Low oil prices and muted sentiment in the industry continued to take a toll on Sembcorp Marine's second-quarter earnings.
The rigbuilder yesterday announced that net profit for the three months ended June 30 sank 17 per cent to $109.2 million, from $131.6 million for the same period a year ago. Revenue fell 9.9 per cent to $1.21 billion, dragged down largely by lower turnover in its rig-building and repair division.
Turnover for its rig-building division, which accounted for more than half of the group's overall turnover, plummeted 28.7 per cent to $622.6 million. But this was offset by higher contribution from offshore and conversion projects as well as its ship-repair business.
Pre-tax profit dropped 16.8 per cent to $136 million, on the back of higher finance costs as well as lower contribution from its associates and joint ventures.
For the half-year, net profit fell 15.3 per cent to $215.1 million, while revenue slid 6.2 per cent to $2.51 billion.
AT A GLANCE
NET PROFIT: $109.2 million (-17%)
REVENUE: $1.21 billion (-9.9%)
DIVIDEND: 4 cents (-20%)
Earnings per share for the quarter was 5.23 cents, down from 6.3 cents previously, while net asset value per share stood at 146.04 cents as at June 30, up from 141.92 cents as at Dec 31 last year.
SembMarine declared an interim dividend of four cents, lower than the five cents it paid out in the same period last year.
The group noted in a statement that "the persistently low oil prices have escalated the ongoing cuts in global exploration and production capital expenditure".
The outlook for new orders of offshore exploration vessels "remains bleak", especially in the jack-up rig segment, which is still suffering from oversupply globally.
"Some customers are deferring or seeking to defer the delivery of their ordered rigs on a lack of charter contracts," said SembMarine.
It had delivered three rigs in the first half of this year, short of the six that had been scheduled initially. Chief financial officer Tan Cheng Tat told a media briefing that it is still in discussion with some clients for some projects and will work out with them any requests for deferments.
"But the order book is already printed," he added. "We're definitely working towards delivering."
SembMarine has a net order book of $10.9 billion, including $1.35 billion in contracts that had been secured since January.
The stock closed two cents lower at $2.71, which is similar to levels last seen during the global financial crisis in 2009.