SINGAPORE - Lower overall business volume which hit the absorption of overhead costs dragged down Sembcorp Marine's (SembMarine) results for the first-quarter ended March 31, 2019.
The offshore-and-marine company on Friday posted a 67.8 per cent fall in Q1 net profit to $1.7 million from $5.3 million profit in the prior year on the lower turnover, which was partially offset by margin recognition from newly secured production floater projects and delivery of rig.
On a per share basis, earnings came in at 0.08 cent for the three-month period, down from 0.25 cent last year.
No dividend has been recommended.
Group revenue slipped 31.3 per cent to $810.6 million, as compared to $1.18 billion in Q1 last year. This was mainly due to lower revenue recognition from rigs and floaters and offshore platform projects, which was partially mitigated by higher repair and upgrade revenue, SembMarine said.
Looking ahead, the group noted that global capex spend for offshore exploration and production continues to improve,especially for the offshore production segment.
"Offshore drilling activities saw some improvement in day rates and utilisation levels for some drilling segments," the company said.
Nonetheless, it added that "competition remains intense", and that production activity for the group is expected to remain low.
On this note, SembMarine said it will continue to manage its costs, cash flows and gearing, and to capitalise on new business opportunities.
SembMarine closed at $1.69 on Thursday, down 1.2 per cent or two cents.