The successful completion of the $1.5 billion renounceable underwritten rights issue has enabled Sembcorp Marine (SembMarine) to meet its projected operational funding requirements through to at least end-2022, says the group on Nov 11.
The mandatory general offer (MGO) by Temasek Holdings’ indirect wholly-owned subsidiary, Startree Investments, has also closed.
Startree now has a stake of 54.6% in SembMarine, adds the group in its business update for the 3QFY2021 ended September.
The group says it continues to face supply chain constraints and shortages of skilled workers due to Covid-19, which has “seriously affected” its 16 projects under execution.
Of these projects, two are scheduled to be completed in FY2021. Another 12 is slated to be completed in FY2022, while the remaining two will progressively be completed in FY2025.
The constraints have led to the delay of delivery of equipment. Longer lead times are also needed to purchase new components.
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While the group have taken measures to recruit workers from alternative sources, recruitment was slower than expected due to the spike in Covid-19 cases in the 3QFY2021.
Attrition of existing workers also contributed to the labour shortage.
As such, the execution and scheduled completion of some of the group’s projects have been delayed by between one and three months.
Meanwhile, overall order visibility across its product segments have improved in the FY2021.
SembMarine has entered into an exclusive front-end engineering and design (FEED) contract with Siccar Point Energy E&P Ltd to deliver a floating production, storage and offloading vessel (FPSO) design solution for the Cambo field in the UK Continental Shelf.
The solution is based on the group’s proprietary Sevan geostationary circular hull, a cost-effective alternative to traditional ship-shaped and turret-moored designs. The group is continuing with pre-FID (final investment decision) work on the Cambo FPSO in anticipation of a FID soon.
On the renewables solutions front, SembMarine will commence the offshore hook-up and commissioning of the topsides in November. This follows the successful installation of Ørsted’s OSS and RCS topsides for the largest AC offshore substation at Hornsea 2 Offshore wind farm.
On Oct 19, SembMarine announced that it expects to continue to incur significant losses in the 2HFY2021.
“While the group has made some progress in managing the delays in project completions, Covid-19 related measures continue to have a serious impact on the group’s performance,” reads the statement issued by the group on Nov 11.
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“Based on information currently available, the group expects that the increased costs to complete the projects, as well as the losses arising from the added delays, will result in significant losses for 2HFY2021, which could potentially be in the range of the losses reported for 1HFY2021,” it adds.
Despite the challenges, SembMarine says it expects “significant growth” in its renewables and other clean energy segments over the next decade and beyond.
“Sembcorp Marine has made significant inroads into this sector and will focus on accelerating its transformation to gain further traction in this segment and strengthen its market share,” says the group in the statement.
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It adds that it will continue to build on its integrated offshore and marine engineering capabilities to move up the value chain and provide a wider suite of products and solutions for its existing business segments.
Shares in SembMarine closed flat at 8.2 cents on Nov 10.
Photo: SembMarine
