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SembCorp Marine reports US$215 million net profit for 1H15

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Oilfield Technology,

As industry conditions continue to be weak with low oil prices, SembCorp Marine has released its 1H15 results. The company has seen its net profit for the period reach US$215 million, a decrease of 15% compared to 1H14.

Key highlights

  • Revenue decreased by 6% year-on-year to US$2.51 billion in 1H15.
  • 1H15 EBITDA decreased 3% year-on-year to US$347 million.
  • 1H15 net profit decreased 15% year-on-year to US$215 million.
  • Return on equity stood at 14% in 1H15.
  • Net order book year-to-date was at US$10.9 billion.

SembCorp Marine’s turnover for the first six months of 2015 decreased by 6% from the 1H14 result, from US$2.68 billion to US$2.51 billion. This decline in revenue was primarily due to a fall in rig building and repair revenue whilst offshore and conversion revenue was higher.

Turnover for the Rig building sector declined 18% from US$1.67 billion to US$1.38 billion within the six both period. SembCorp Marine delivered the Helix semi-submersible Q5000, the Prosafe accommodation semi-submersible and a Hakuryu jack-up rig during 1H15. Moreover, a further 16 rigs are in the work-in-progress stage.

In 1H15, EBITDA declined 3% compared to the corresponding period in 2014, to US$347 million. Operating profit fell 6% to US$285 million, from US$303 million in 1H14.

At the pre-tax level, SembCorp Marine’s profit of US$271 million in 1H15 was 15% lower than the US$318 million achieved in the previous year.

Ship repair revenue was 14% lower at US$266 million in 1H 2015 compared with US$308 million in the corresponding period in 2014 as average revenue per vessel remained low although the number of ships repaired increased.

Finally, SembCorp Marine’s pre-tax profit was 17% lower than 1H14 on lower contribution from associates and joint ventures and higher finance costs. Group finance costs increased to US$11.2 million, from US$3.6 million previously.

Looking into the future

The persistently low oil prices have escalated the ongoing cuts in global exploration and production capital expenditure. Some customers are deferring or seeking to defer the delivery of their ordered rigs on a lack of charter contracts.

Adapted from press release by David Bizley

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