Results for 4Q 2016 and FY 2016
FY 2016 Net Profit of $79 Million
Key highlights: For the 12 months to December 31 2016,
- Revenue totalled $3.54 billion.
- EBITDA of $384 million.
- Net profit totalled $79 million.
- Positive operating cashflow of $669 million from negative $867 million in FY 2015.
Singapore, February 22, 2017: Sembcorp Marine posted Group revenue of $3.54 billion for the year ended December 31, 2016 (FY 2016) compared with $4.97 billion previously. The Group reported an earnings turnaround in FY 2016 with EBITDA totalling $384 million while Net Profit was $79 million. Operating cashflow was $669 million in FY 2016 compared with negative cashflow of $867 million in FY 2015.
Turnover for Rigs & Floaters was $1.89 billion for FY 2016, a 43% decline from the $3.32 billion booked in the previous year due to lower revenue from drillships and other rigs. Deliveries included two jack-up rigs, one accommodation semi-submersible and an FPSO conversion during the year.
Offshore Platforms revenue increased 10% year-on-year to $1.12 billion in FY 2016 from $1.02 billion in FY 2015 on higher recognition of offshore platform projects. Significant deliveries include that of three production platform topsides (platform process, drilling and quarters topsides) to a key customer.
Despite an increase in the number of ships repaired, Repairs & Upgrades revenue declined 18% year-on-year from $557 million to $460 million due to lower average revenue per vessel reflecting tough competition in the segment.
FY 2016 net profit totalled $79 million, compared with FY 2015 net loss of $290 million. In FY 2015, the Group made $609 million in impairment and provisions for rigs ($329 million for Sete Brasil drillship projects and $280 million for other rigs).
4Q 2016 VERSUS 4Q 2015
On a quarterly basis, Group turnover for 4Q 2016 was $830 million, 38% lower compared with $1.33 billion in 4Q 2015. Rigs and Floaters revenue declined 42% on lower revenue recognition of drillship projects.
Lower revenue recognition from its projects also contributed to a 32% decline in Offshore Platforms. Repairs & Upgrades revenue dropped 31% on lower average revenue per vessel repaired and a slight drop in the number of vessels repaired.
Cash generated from operating activities as at FY 2016 totalled $669 million on successful project deliveries and milestone receipts from on-going projects. Inventories and work-in-progress also declined in FY 2016 with deliveries and collection from projects with milestone payments. Net debt increased 7% to $2.94 billion on strategic acquisitions (Gravifloat, LMG, Aragon, PPL Shipyard), while capex reduced upon completion of Phase II of Tuas Boulevard Yard.
The Board of Directors recommends the payment of a final ordinary one-tier tax exempt dividend of 1.0 cents per share (2.0 cents previously). Together with the 1.5 cents paid during the interim results, total dividend for FY 2016 is 2.5 cents, from 6.0 cents previously, which represents a dividend payout ratio of 66%. The final dividend, if approved at the AGM on April 18, 2017, will be paid on May 12, 2017.
While prospects for the oil & gas industry have taken a more positive turn following the November 2016 agreement by OPEC and major non-OPEC countries to cut production, we believe a more robust recovery may take longer. Despite the challenging outlook and intense competition, we believe that growth prospects for the offshore and marine industry remain positive in the medium to long term.
However, with increasing enquiries for non-drilling solutions, we foresee an earlier recovery in demand for fixed platforms, FPSO and FSO conversions and new-builds in the next few years. Rising global demand for gas also augers well for our broad-based LNG solutions and capabilities. We believe these are the key segments that will offer opportunities in 2017.
The Group’s strategy and focus remain anchored on strengthening and optimising our talent pool; pursuing operational excellence in executing our projects; investing in new capabilities, products and technological innovation to help grow our order book; and prudently managing our financial resources to preserve financial flexibility and ensure overall sustainability of our business.
For more information, please contact:
Ms Lisa Lee
Head of Investor Relations
Tel No: (65) 6262 7107
Mr David Wong
Head of Corporate Communications
Tel No: (65) 6262 8036
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