Sembcorp Marine reports increased profits

sembcorp marine peopleMAY 3, 2013 — Singapore's Sembcorp Marine today reported a 5 percent growth in net profit from Singapore S$113 million in 1Q 2012 to S$119 million in 1Q 2013. Group turnover for the first quarter of 2013 registered an 11 percent increase to S$1.1 billion as compared with S$943 million for the corresponding period in 2012. The increase came mainly from higher revenue recognition from rig building activities.

Group operating profit increased by 19 percent from S$120 million in 1Q 2012 to S$143 million in 1Q 2013. At pre-tax level, Group profit at S$149 million was 4 percent higher than the S$144 million achieved in the first quarter of last year. The increased contribution which came mainly from the higher operating margins from rig building and ship repair businesses was offset by the lower contribution from an associated company and the absence of interest income received in 1Q 2012 for deferred payment granted to customers.

FINANCIAL HIGHLIGHTS

Year Description ($’m)1Q 20131Q 2012% change
Turnover 1,050 943 11
Gross Profit 156 157 (1)
EBITDA 167 141 18
Operating Profit 143 120 19
Pre-tax Profit 149 144 4
Net Profit 119 113 5
EPS, basic (cents) 5.69 5.43 5
NAV (cents) 121.7 116.8* 4

OUTLOOK

Sembcorp Marine reports that it has a strong net order book of S$13.6 billion with completion and deliveries stretching till 2019. This includes S$1.7 billion in rig orders and offshore platform contracts secured since the start of 2013. The Group remains focused on operational efficiency, productivity improvements, safety management and the timely deliveries of orders to our customers.

The fundamentals driving the marine and offshore industry remain intact underpinned by healthy oil prices and projected increases in offshore exploration and production (E&P) spending. Demand for rigs is expected to remain strong given the ageing rig fleet and the increasing focus by oil companies for new, safer and more efficient rigs, in particular high specification rigs capable of operating in harsh and deepwater environment.

For ship repair, there is continued demand for upgrading and life extension work for LNG carriers as well as repair and upgrading work for cruise ships and offshore vessels. Demand for the Group's big docks remains strong.

Overall, enquiries remain healthy across the Group's diverse business segments of ship repair, ship conversion & offshore platforms and rig building. However, competition is intense and impacts margin.

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