First Quarter 2015 Net Profit at $106 Million
Singapore, April 27, 2015: Sembcorp Marine achieved a net profit of $106 million for the three months ended March 31, 2015, which represented a 14% decline compared with 1Q2014.
Group turnover for three months ended March 31, 2015 declined 2% year-on-year to $1.30 billion, which compares with $1.34 billion for the corresponding period in 2014. The decline in revenue was due mainly to decline in rig building and repair revenue recognised during the first quarter compared with last year.
In 1Q2015, Group EBITDA (earnings before interest, tax and depreciation) declined 4% year-on-year to $169 million, while operating profit fell 7% to $138 million, from $149 million in the previous corresponding period.
At the pre-tax level, Group profit of $135 million was 13% lower than the $155 million achieved in the previous year. Associate and joint venture income declined 32% year on year to $3.9 million.
Turnover for the Rig building sector declined 5% year on year from $796 million to $753 million. The Group delivered the Prosafe accommodation semi-submersible as well as one Hakuryu jack-up rig during the quarter, with another nine rigs in the work-in-progress stage and scheduled for delivery this year.
Offshore and conversion revenue increased 19% from $362 million in 1Q2014 to $431 million in 1Q2015.
Ship repair revenue was 37% lower at $100 million in 1Q 2015 compared with $158 million in the corresponding period in 2014 as average revenue per vessel remained low although the number of ships repaired increased.
1Q 2015 VERSUS 1Q 2014
On a quarterly basis, Group turnover for 1Q 2015 at $1.30 billion was 2% lower when compared with $1.34 billion for the same period in 2014.
Group gross profit of $169 million was 1% lower on year-on-year basis while operating profit was 7% lower at $138 million, mainly due to lower rig building and repair segment earnings.
At the operating level, Group profit fell 7% year on year to $138 million on higher operating expenses of which a forex loss of $10.9 million was booked. This arose mainly from the revaluation of assets and liabilities denominated in Euro, United States dollar and Brazilian Real.
Group pre-tax profit was 13% lower at $135 million, again on lower repair and rig building segments contribution. Group interest expense also increased to $9.5 million from $2.5 million previously, while interest income fell 18% year on year to $2.4 million.
Net profit in 1Q 2015 declined 14% year-on-year to $106 million compared with $122 million in 1Q 2014.
The ongoing cutback in global exploration and production expenditure has resulted in a scarcity of new orders for the industry this year. Customers strive to conserve cash and consolidate their offshore fleet operations as charters are not renewed or are renewed at significantly lower rates. New rigs face the prospect of not securing charters despite their higher technical specifications and superior capabilities. As a result, the Group faces a challenging year ahead.
Meanwhile, Brazil’s oil and gas industry continues to be mired in uncertainty.We continue to engage with our customers to find the best way forward for our drillship projects and are exploring all options including slowing down the construction.
The Group’s net orderbook to-date stands at $10.6 billion with deliveries stretching into 2019. Competition for new projects remains intense. The Group will focus on cost and capital management and will continue to leverage on its strong track record, expanded product capabilities and alliance partnerships.
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