Sembcorp Marine’s second-quarter net profit sagged 17% year on year to SGD109 million (USD80 million) as revenues sank at its rig-building unit.
The rig-building unit’s turnover dropped to SGD622.6 million for the quarter, down from SGD873.6 million in the same period last year, the Singapore-based company revealed in figures released on 29 July.
Yet Sembcorp Marine’s offshore and conversion unit boosted its turnover to SGD401.8 million, up from SGD295.4 million in the second quarter of 2014.
The company’s ship repair business also posted higher turnover, with sales of SGD165.7 million, up from SGD149.8 million.
Like many of its peers, Sembcorp Marine expects oil shock to present challenges as oil companies pull back from expanding their exploration and production.
Sembcorp Marine also admitted that some customers are putting off or seeking to delay the delivery of ordered rigs due to the lack of charter contracts.
“While the new order outlook for offshore exploration vessels remains bleak – particularly in the jack-up segment, which is in an oversupply situation – the group has benefited from its strategy to diversify its product offering in addition to drilling solutions,” said the company.
The Petrobras corruption scandal also presents uncertainties for Sembcorp.
Like Keppel Corporation, Sembcorp Marine said it has not been paid by Sete Brasil for drillships and may slow down construction if the situation persists.
Sembcorp Marine’s net order book stands SGD10.9 billion.