Sembcorp Marine (SembMarine) has reported net loss of $647.2 million for the 1HFY2021 ended June, deepening from the net loss of $192.1 million reported in the 1HFY2020.
Loss per share stood at 5.16 cents over 12.56 billion shares in SembMarine, from loss per share of 8.83 cents over 2.18 billion shares in the 1HFY2020 on a fully diluted basis.
The net loss for the half-year period includes provisions of $472 million due to $361 million in additional costs incurred from added labour and other expenses for the next six to 18 months to complete existing projects.
The provisions also took into account an increase in provisions for yards’ reinstatement of $65 million as well as an increase in asset impairment loss of $46 million.
The deeper net loss was also higher due to higher gross loss, an increase in restoration cost and impairment loss on a marine vessel and offset by net foreign exchange gain, lower net finance costs and higher tax credit.
“The challenges faced by the group are real and severe. Due to the protracted effects from the Covid-19 pandemic, these challenges have lasted longer than anticipated,” says Wong Weng Sun, president and CEO of SembMarine, in a statement via webcast on July 29.
For the 1HFY2021, the group recorded a 6.8% decline y-o-y in revenue of $844 million due to the lower revenue recognition from rigs and floaters, repairs and upgrades and specialised shipbuilding projects due to the ongoing Covid-19 disruptions. This was, however, mitigated by higher revenue recognition from offshore platforms projects.
Gross loss stood at $588.2 million, from the $194.6 million reported in the 1HFY2020 mainly due to the impact of disruptions caused by Covid-19.
As at June 30, the group has net current liabilities totalling some $694 million due mainly from term loans maturing in the next 12 months.
As at June 30, cash and cash equivalents stood at $788.3 million.
No dividend has been recommended for the period.
The group says it still faces uncertainties due to the Covid-19-led measures of border controls as well as quarantine and workforce supply restraints.
“Continuing efforts to resolve the skilled manpower shortage on a timely basis is a key priority to address the risk of further project delays or terminations,” says the group in a statement on July 29.
The group says it expects to incur losses in the 2HFY2021 due to insufficient revenues to cover overhead costs.
The potential combination of SembMarine and Keppel O&M is also currently at a preliminary stage, says Wong.
“There is no certainty that the potential combination will take place as it is subject to among others, satisfactory due diligence, further negotiations between parties, execution of definitive agreements, receipt of the relevant regulatory approvals and the approval of shareholders of the respective parties,” he adds.
Shares in SembMarine closed 0.2 cent lower or 1.8% down at 10.8 cents on July 29.
Photo: SembMarine
