Sembcorp Marine profit up 24% to $148.8mln

Group expects profit growth to continue next year as outlook for global oil demand soars.

Sembcorp Marine delivered another quarter of growth with an increase of 23.8% in Group net profit to $148.8 million from $120.2 million in 1Q 2009. Group turnover was comparable at $1,359.4 million as compared with $1,363.5 million for the corresponding period in 2009, according to a report by Sembcorp Marine.

Group operating profit at $159.6 million was 18.6% higher than the same quarter in the previous year. Group pre-tax profit increased 22.2% to $184.9 million from $151.3 million in 1Q 2009 attributable to higher operating margins from rig building and offshore and conversion projects.

The Group has a net order book of S$5.0 billion with completion and deliveries stretching till December 2012. This includes S$680 million contract orders secured to-date since January 2010 comprising S$550 million for the construction of Ekofisk accommodation topside for the North Sea for ConocoPhillips Skandinavia AS, Norway and the S$130 million pre-FPSO conversion contract for Petrobras Netherlands B.V.

The outlook for global oil demand continues to improve. Oil prices have fluctuated within the range of mid-US$70 to mid-US$80 a barrel. The long-term fundamentals driving deepwater exploration and production activities are expected to continue to boost production reserves to meet growing energy demand.

While the current oil spill in the Gulf of Mexico may affect offshore drilling in that region, it is too early to assess the incident's overall effect on the drilling rig market. Sembcorp's initial appraisal of the situation gives no major cause for immediate concern.

FY 2009 was an exceptional year in terms of profit. The Group expects to achieve satisfactory results for FY 2010.