SINGAPORE (Feb 22): Sembcorp Marine posted earnings of $34.3 million in the 4Q16 ended Dec 31, 2016, reversing from a net loss of $536.9 million a year ago.
This was mainly due to the absence of $609 million in impairment and provisions for rigs incurred in 4Q15.
Revenue in 4Q16 fell 37.5% to $829.9 million, from $1.33 billion a year ago.
This was mainly due to the lower revenue recognition for rig building projects resulting from customers’ delivery deferment requests, lower revenue recognition for offshore platforms projects, and lower repair businesses.
This brings SembMarine’s FY16 earnings to $78.8 million, compared to a net loss of $289.7 million a year ago. Full year revenue fell 28.6% to $3.54 billion, from $4.97 billion in FY15.
Revenue for its rigs and floaters segment fell 42% to $830 million in 4Q16 due to lower revenue recognition of drillship projects.
Revenue from offshore platforms fell 32% during the quarter, also due to lower revenue recognition.
Repairs and upgrades revenue dropped 31% on lower average revenue per vessel repaired and a slight drop in the number of vessels repaired.
As at Dec 31, 2016, cash and cash equivalents stood at $1.22 billion.
SembMarine has proposed a final dividend of 1.0 cent per share, from 2.0 cents per share a year ago.
Together with an interim dividend of 1.5 cents per share paid earlier, total dividend for FY16 is 2.5 cents, from 6.0 cents previously. This represents a dividend payout ratio of 66%.
Looking ahead, SembMarine says in a filing to SGX on Wednesday that a more robust recovery may take longer despite prospects for the oil and gas industry taking a more positive turn following the OPEC agreement to cut production.
“Despite the challenging outlook and intense competition, we believe that growth prospects for the offshore and marine industry remain positive in the medium to long term,” says Sembcorp Marine President and CEO Wong Weng Sun.
“We remain confident that we will weather and ride the cyclical downturn and be well-placed to benefit from the recovery ahead,” Wong adds.
Sembcorp Marine closed 1 cent higher at $1.54 on Wednesday.
