Sembcorp Marine sank into $55.62m loss in Q2

It blamed loss upon the sale of a semi-submersible.

Sembcorp Marine is still in the red after a $55.62m loss in the second quarter of 2018 and a $50.31m loss in the first half of the year. However, turnover soared 150.8% to $1.62b in Q2 and 101.3% to $2.81b in H1.

According to its financial statement, gross loss was mainly due to loss upon the sale of a semi-submersible, lower overall business volume, especially in rigs & floaters and offshore platforms, which impacted the absorption of overhead costs, offset by margin recognition upon delivery of rigs.

“Offshore rig order recovery will take some time as the market remains oversupplied, particularly for jack-up rigs,” Sembmarine said. “There are some pockets of initial demand for mid and deepwater rigs.”

Turnover increased mainly due to higher revenue recognition for rigs & floaters upon the delivery of two jack-up rigs to Borr Drilling and sale of a semi-submersible rig.

For Q2, Sembmarine’s rigs & floaters turnover grew more than three-fold (341.7%) to $1.39b, repairs & upgrades turnover dipped 8% to $126m, offshore platforms turnover fell 50.5% to $84.9m, whilst turnover from other activities dropped 9.2% to $22.7m.

“The majority of new orders have been for offshore production projects,” it added. “This trend is expected to continue and Sembmarine is responding to an encouraging pipeline of enquiries and tenders for innovative engineering solutions.”

However, it warned that overall business volume and activity are expected to remain low for the immediate quarters. “The trend of negative operating profit will continue in the near term. Our cash resources remain sufficient and we will prudently manage our costs and cash flows to align them with business volume and potential opportunities,” it concluded.