FY 2014 Net Profit Increased to $560 Million
Singapore, February 12, 2015: Sembcorp Marine achieved a 1% year-on-year increase in net profit from $556 million to $560 million for the year ended December 31 2014, despite challenging market conditions.
Group turnover for the year FY2014 grew 6% year-on-year to $5.8 billion, which compares with $5.5 billion for the corresponding period in 2013. The higher revenue came mainly from increased contribution from the Group’s rig building activities and from offshore platform projects.
In FY2014, Group EBITDA (earnings before interest, tax and depreciation) increased by 10% year-on-year to $822 million, while operating profit grew 10% to $707 million, from $644 million in the previous corresponding period.
At the pre-tax level, Group profit of $707 million was 7% higher than the $661 million achieved in the previous year. Associate and joint venture income declined 12% year on year to $9.9 million.
Turnover for the Rig building sector increased 6% year on year from $3.6 billion to $3.8 billion. The Group delivered eight jack-up rigs for the 12 months ended December, with another ten rigs in the work in progress or planning stage.
The Fixed platform segment registered a 6% increase in revenue from $868 million to $925 million for the year, with three major project deliveries in FY2014. Offshore and conversion revenue increased 28% from $336 million in FY2013 to $428 million in FY2014, with three project deliveries during the period.
Ship repair revenue was 9% lower at $622 million in FY2014 compared with $681 million in the corresponding period in 2013 as average revenue per vessel remained low although the number of ships repaired has increased.
4Q 2014 VERSUS 4Q 2013
On a quarterly basis, Group turnover for 4Q 2014 at $1.4 billion was 15% lower when compared with $1.7 billion for the same period in 2013.
Group gross profit of $275 million was 20% higher on year-on-year basis while operating profit was 24% higher at $232 million, mainly due to higher rig building and fixed platform segment earnings.
Group pre-tax profit was 16% higher at $218 million, again on higher rig building and fixed platform segments contribution, despite significantly lower associate and joint venture contributions.
Net profit in 4Q 2014 declined 5% year-on-year to $174 million compared with $182 million in 4Q 2013 which saw a write-back of tax mainly attributable to recognition of tax incentives.
The Board of Directors are pleased to recommend the payment of a final ordinary one-tier tax-exempt dividend of 8.00 cents per share. Together with the 5.00 cents paid during the interim results, total dividend paid is 13.00 cents, unchanged from FY2013. The final dividend, if approved at the AGM to be held on 17 April 2015, will be paid on 14 May 2015.
With the steep decline in oil prices in the second half of 2014, major oil and gas companies have announced reduced capital expenditure and deferred some of their planned projects. The Group continues to face tough competition in upcoming tenders for new projects in the offshore exploration and production sectors.
For the ship repair sector, there is continued demand for repair, upgrading and life extension work, in particular in the niche segments of LNG carriers, passenger/cruise vessels and offshore vessels. Demand for the Group’s big docks remains strong as alliance and long-term customers continue to provide a stable and steady base-load which would help cushion the impact of weaker demand in the offshore rig-building segment.
We remain well positioned to benefit from the upturn with our expanded product capabilities, state-of-the-art facilities and sound track record. Our performance in 2015 will be supported by our order book.
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