Sembcorp Marine's Q4 net profit dives 94.9%, Latest Business News - The New Paper
Business

Sembcorp Marine's Q4 net profit dives 94.9%

This article is more than 12 months old

Continued low business volume, asset impairment and accelerated depreciation took a heavy toll on offshore group Sembcorp Marine in the fourth quarter.

Net profit dived 94.9 per cent to $5.9 million for the three months to Dec 31, although revenue edged up 0.2 per cent to $913.2 million.

This robust effort was driven by the rig and floaters segment, which lifted SembMarine's turnover by 16.7 per cent to $745.7 million.

Sales from offshore platforms fell 89.2 per cent to $11.8 million.

Cost of sales rose 14.4 per cent to $893.3 million for the quarter, dragging gross profit down 84.8 per cent to $19.9 million as low business volume reduced the group's ability to absorb overheads.

There was also a 17.7 per cent increase in depreciation and amortisation to $56.5 million, a $4.7 million impairment on a vessel and the absence of a $32.4 million write-back from rig contract terminations recorded a year earlier.

Earnings per share dropped to 0.28 cents, down 95 per cent from 5.61 cents previously.

SembMarine sank into the red for the full year with a net loss of $74.1 million, a stark contrast with its net profit of $260.2 million the previous year. Its cost of sales jumped 81.7 per cent to $4.88 billion from $2.69 billion in 2017.

Full-year revenue grew 61 per cent to $4.89 billion, due largely to revenue recognition on rig sales as well as deliveryand recognition of other projects.

Offshore platform revenue last year fell 74.8 per cent to $184.2 million due to fewer contracts on hand and the completion of existing ones. Turnover from repairs and upgrades slipped 4.6 per cent to $476.3 million with fewer ships repaired.

SembMarine did not declare a full-year dividend, opting instead for "a prudent approach to conserving cash in light of the challenging environment". It paid two cents a share a year ago.

SembMarine shares closed up 6.3 per cent at $ 1.68 yesterday following the results announcement. - THE STRAITS TIMES

BUSINESS & FINANCE