SembMarine reports 3Q19 net loss widened as business volume remained low

Singapore shipyards in Tuas areaSingapore shipyards in Tuas area

Sembcorp Marine reported Wednesday its third-quarter net loss widened to S$52.51 million, mainly on additional costs for rigs and floaters projects and continued low overall business volume.

Accelerated depreciation of S$10 million from the transformation and yard consolidation strategy also contributed to losses, the company said.

The losses were partly offset by margin recognition from newly secured production floater projects and the delivery of a rig, SembMarine said.

The net loss missed a forecast from CGS-CIMB for a net loss of S$30 million.

Turnover for the quarter ended 30 September fell 38.6 percent on-year to S$717.15 million on lower recognition from rigs and floaters and offshore platform projects, partly offset by higher repair and upgrade revenue, the rig-builder said in a filing to SGX. The year-earlier quarter had also included the delivery of two jack-up rigs, SembMarine said.

“Challenges in the offshore and marine sector persist and competition remains intense. Activity levels in all segments remain low except for repairs and upgrades, which continues to improve, underpinned by the cruise ship segment, and IMO regulations that require installation of ballast water treatment systems and gas scrubbers,” SembMarine said.

“The company is expecting the trend of losses to continue into the fourth quarter, and the full year loss to be higher than last year,” it added.

Other operating income increased 61.2 percent on-year to S$26.51 million on a foreign exchange gain, SembMarine said.

General and administrative expenses fell 26.2 percent on-year to S$19.34 million on lower personnel-related costs, SembMarine said.

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