Sembmarine's loss narrows to $6.83m in H1

Revenue from its rigs & floaters business nearly halved.

Sembcorp Marine’s (SembMarine) loss has significantly narrowed by 86.4% YoY in H1 to $6.83m from $50.31m loss in the same period in 2018, according to its financial statement, although the firm remains in the red. The rig builder cited low overall business volume which impacted the absorption of overhead costs, offset by margin recognition from newly secured production floater projects and delivery of rig.

Also read: Sembmarine Q1 profit plunges 67.8% to $1.7m

Group revenue also plunged 45.1% YoY to $1.54b from $2.81b in the corresponding quarter amidst lower revenue from rigs and floaters and offshore platform projects, partially offset by higher revenue from repairs and upgrades.

Revenue of its rigs & floaters business hit $1.22b in H1, which fell nearly half compared to $2.41b in H1 2018. Revenue contributions largely came from higher percentage recognition from drillship and floater projects, including the Transocean drillships, the Shell Vito floating production unit (FPU), the Johan Castberg floating, production, storage and offloading (FPSO), and the Karish FPSO projects, as well as revenue recognition on delivery of one jack-up rig to
Borr Drilling.

Also read: Sembmarine banks on more orders to bounce back into the black

Revenue from its offshore platforms revenue also fell to $49m from $147m reported in H1 2018 due to the lack of large-scale contracts recognised during the period, as well as low initial revenue recognition from the Hornsea II windfarm substations and Tangguh module projects.

Only the repairs and upgrades arm showed positive growth with revenue rising $245m in H1 from $205m in H1 2018, driven by higher value of work done per vessel. Average revenue per vessel was higher at $1.6m (H1 2018: $1.3m) on improved vessel mix of higher-value works.

Furthermore, the group secured new contracts in H1 amounting to $175m. It includes the design and construction of a 12,000 cubic metre LNG bunker vessel as well as repair and modernisation works on 13 cruise ships.

The firm stated that they are expecting higher losses in H2, with full year losses projected to be similar in range to last year’s. In Q4 2018, Sembmarine’s profits plunged 94.9% YoY to $5.93m from $117.31m.