Published November 5, 2009

SembMarine Q3 profit up 2.6%

$144.6m posted is highest quarterly earnings the group has ever attained

By VINCENT WEE

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SEMBCORP Marine's third-quarter net profit was almost flat from the previous corresponding quarter, rising 2.6 per cent to $144.6 million, although this was the highest quarterly earnings ever attained, while turnover rose 32.9 per cent to $1.52 billion compared with $1.14 billion in Q3 FY2008.

Related links: Click here for SembMarine's news release Financial statements

Pre-tax profit inched up to $183 million from $181 million in Q3 FY2008 as higher operating margins from rigbuilding projects were offset by the substantially lower contribution from associate Cosco Shipyard Group.

For the first nine months, net profit rose 11.8 per cent to $402.9 million from $360.5 million a year ago as turnover increased 27.1 per cent to $4.38 billion from $3.45 billion. Pre-tax profit was up 12.3 per cent to $512.8 million from $456.8 million for the first nine months of 2008, once again showing the effects of the repeated pattern of higher operating margins being dragged down by Cosco's woes.

SembMarine's share of results of associates and joint ventures plunged 77.9 per cent and 67.5 per cent to $7.7 million and $35.1 million for the third quarter and first nine months respectively. Meanwhile, the group also took a hit from foreign exchange losses of $5.5 million and $6.8 million in the two respective periods due to the weakening of the US dollar against the local currency.

The group has a net order book of $6.7 billion comprising rig building, ship conversion and offshore projects. This includes the $1.12 billion in new orders secured in the first half of 2009. These secured projects will provide a ready base-load of work and keep the group's yards busy with progressive completion and deliveries from the fourth quarter until 2012.

With the world economy showing some signs of recovery in the third quarter of 2009, driven largely by Asia, the demand for energy is expected to grow. Fundamentals for the offshore oil and gas sector remain intact with prices of oil stabilising within the US$70 to US$80 a barrel range, SembMarine said.

The shiprepair business is expected to remain reasonably good for the rest of 2009 with the big docks well booked and the strong support provided by the group's Alliance/FCC and regular customers, it added.