SINGAPORE (Nov 14): Following a wider net loss incurred by its listed subsidiary Sembcorp Marine, Sembcorp Industries announced a weak set of results for 3Q19 ended Sept 30.
During the quarter, the company reported a 19% y-o-y decline in revenue to $2.45 billion, due to weaker revenue contributions from its energy and marine businesses.
Sembcorp says its energy business recorded a lower provision of energy products and related services from its operations in Singapore and UK. This was compounded by the absence of revenue contribution from South Africa post-divestment.
On the other hand, the company says its marine business – in particular, Sembmarine – registered lower revenue recognition from rigs and floaters projects.
It did not help that the company’s urban business recorded lower earnings, as a result of a decline in the share of results of associates and joint ventures.
As a result, Sembcorp’s 3Q19 earnings tumbled 13% y-o-y to $71 million.
Undoubtedly, the weak 3Q19 results dragged the company’s 9M19 results.
Sembcorp’s 9M19 revenue dropped 20% y-o-y to $7.3 billion, while earnings fell 9% y-o-y to $262 million.
Despite the overall poor performance, the company says its energy and urban businesses will continue to underpin its performance going forward.
The company notes that Sembmarine is expecting full-year losses as the market environment continues to be challenging for the offshore and marine sector.
“While there are downside risks to global economic growth expectations with heightened policy uncertainty and trade tensions, the group’s diversified business portfolio is expected to provide resilience to weather the prevailing macroeconomic uncertainties,” says Sembcorp.
Shares in Sembcorp closed 1 cent higher at $2.29 on Thursday.
