Sembcorp Marine warns of challenging year ahead after dismal Q1 results

It might delay construction to slash costs.

Sembcorp Marine told shareholders to brace for a “challenging year ahead” after it posted a dismal set of first quarter results.

SembMarine admitted that it is grappling with a scarcity of new orders, as global oil players cut exploration and production expenditure.

“Customers strive to conserve cash and consolidate their offshore fleet operations as charters are not renewed or are renewed at significantly lower rates. New rigs face the prospect of not securing charters despite their higher technical specifications and superior capabilities. As a result, the Group faces a challenging year ahead,” SembMarine stated.

SembMarine also warned that Brazil’s oil and gas industry continues to mired in uncertainty. Brazilian orders make up almost half of SembMarine’s orderbook.

“We continue to engage with our customers to find the best way forward for our drillship projects and are exploring all options including slowing down the construction. Competition for new projects remains intense,” stated SembMarine.