Sembcorp Industries profits sink 13% to $71m in Q3

Lower revenues from rigs and floaters dragged on turnover growth.

Sembcorp Industries' net profit fell 13% YoY to $71m in Q3 2019, the company announced. Turnover dropped 19% to $2.45b over the same period.

For 9M 2019, profit rose 9% YoY to $262m, although turnover declined 20% to $7.3b, mainly attributed to lower revenues from rigs and floaters as well as offshore platform projects from its Marine business.

According to Sembcorp Industries group president & CEO Neil McGregor, its profit was underpinned by its energy business despite losses from its marine business.

Net profit from its Energy business climbed 5% to $258m in 9M 2019, which was driven by contributions from new power assets in Bangladesh and Myanmar, as well as from additional renewables capacity in China.

On the other hand, its Marine business posted a net loss of $38m from $50m over the same period. Its Urban business also saw its profits fall to $30m from $53m over the same period.

According to OCBC Investment Research, the Marine segment may cause a bigger drag for the group than expected. “A sustained recovery in new orders will take some time, and competition remains intense with margins compressed,” its research team wrote.