SembCorp Marine reports drop in profit

26 February 2012 (Last Updated February 26th, 2012 18:30)

Singapore-based shipbuilder, SembCorp Marine has reported a 4% drop in profit to S$229m ($182.4m) during the fourth quarter ended 31 December 2011, compared to the S$239m ($190m) reported during Q4 of 2010.

Singapore-based shipbuilder, SembCorp Marine has reported a 4% drop in profit to S$229m ($182.4m) during the fourth quarter ended 31 December 2011, compared to the S$239m ($190m) reported during Q4 of 2010.

According to the company, the dip in net profit was mainly because of the lower operating profit from rig building projects.

For the fourth quarter of 2011, the company reported an operating profit of S$201m ($160m), a decrease of 33% compared to S$298m ($237.4m) it reported for the same period prior year.

Operating profit dropped because of the margin recognition of the initial few units of the newly launched designs for the rig building projects as compared to the higher margin recognition from the repeated rig building projects in the last year quarter.

Revenue for the quarter was S$998m ($795m), an increase of 2% compared to S$983m ($783m) for the same period in the previous year.

For the full year ended 31 December 2011 the company posted net profit of S$752m ($599m), a decrease of 13% compared to S$860m ($685m) in 2010.

Decrease in net profit for the full year, was due to lower operating profit from rig building projects as well as the receipt of the full and final amicable settlement of the disputed foreign exchange transactions with Societe Generale in 2010.

The company reported an operating profit of S$737m ($587m) for the full year of 2011, a decrease of 22% compared to S$943m ($751.2m) it reported for the same period prior year.

For the full year of 2011, revenue was S$3.96bn ($3.15bn), a decrease of 13% compared to S$4.55bn ($3.62bn) for last year period.

The company said, the decrease in revenue was attributable to the timing, number and value of the projects in changing revenue recognition stages in the three different sectors of rig building, ship conversion & offshore and ship repair.

SembCorp has a net order book of S$6.3bn ($5bn) with completion and deliveries stretching until the second quarter of 2015, including S$3.72bn ($2.96bn) in contract orders secured last year and S$1.3bn ($1.03bn) worth of contracts secured since the start of 2012, excluding ship repair contracts.

The company expects its ship repair, ship conversion and offshore capacity to double from the current 1.9 million dwt after Singapore shipyard becomes operational next year.

Sembcorp Marine earlier this month secured its first drill ship order for $793m from Sete Brasil Participacoes to develop oil and gas fields on Brazilian coast.

The drill ship is expected to be delivered in the second quarter of 2015 from its Brazilian shipyard.