SINGAPORE (Feb 20): Sembcorp Marine, the engineering solutions provider to the global offshore, marine and energy industries, reported a net loss of $77.7 million for 4QFY2019 ended December, compared to earnings of $5.9 million a year ago.
This widened the group’s losses for FY2019 to $137.2 million, some 85% higher than losses of $74.1 million in FY2018.
This resulted in a loss per share of 3.72 cents for the quarter, compared to earnings per share of 0.28 cents for the corresponding quarter last year.
SembMarine says that the net loss was a result of accelerated depreciation for its Tanjong Kling Yard and continued low overall business volume. These, however, were partly offset by profits from the repairs and upgrade business, which saw a rise in profits on improved margins and better product mix.
Revenue for the quarter came in at $623.5 million, some 31.7% lower than $913.2 million last year. This was attributable mainly to lower revenue recognition from rigs and floaters projects which saw earnings halved to some $333.9 million, but was partially mitigated by higher repair and upgrade revenue.
Cost of sales for the quarter fell 22.1% to $695.6 million from $893.3 million.
Correspondingly, the group booked a gross loss of $72.0 million compared to a gross profit of $19.9 million in 4QFY2018.
As at end-December, cash and cash equivalents stood at $389.3 million.
No dividend was recommended for either 4QFY2019, or FY2019.
SembMarine says that it had secured new contracts worth $1.49 billion in FY2019, compared to contracts worth $1.18 billion in FY2018. With these new contracts, the group’s net order book stands at $2.436 billion, excluding the Sete Brasil drill ship contracts.
In its outlook statement, SembMarine says that business activity levels remain low for all segments except for repairs and upgrades, which continues to improve, underpinned by IMO regulations that require installation of ballast water treatment systems and gas scrubbers.
The group is also expecting the trend of losses to continue into 2020, amid challenges such as supply chain disruptions due to the Covid-19 virus outbreak which could affect execution of its projects, as well as intense competition across all business segments.
As at 9.15am, shares in SembMarine are trading five cents lower, or 4.03% down, at $1.19.
