Net Profit Down at Sembcorp Marine

Ser Jing - Sembcorp Marine First Quarter Result, Full Steam Ahead (pic) Sembcorp Marine Limited (SGX: S51) released its 2nd Quarter 2013 (2Q 2013) results after market close yesterday.

The revenue for 2Q 2013 went down 7.6% from $1.2 billion in 2Q 2012 to $1.1 billion in 2Q 2013, mainly due to timing in recognition of rig building and ship conversion & offshore projects. On a half yearly basis, turnover was 0.7% higher at $2,174.4 million as compared to $2,159.6 million in 1H 2012.

The Group achieved a net profit of $124.9 million in 2Q 2013. This was 12.5% lower compared to the previous year. On a half yearly basis, net profit at $243.6 million was 4.8% lower as compared with 1H 2012. The decline was mainly due to timing in recognition with one unit of accommodation semi-submersible rig achieving initial recognition as compared with three jack-up rigs that achieved initial recognition in 1H 2012.

On the balance sheet, the long-term debt increased by $250 million to $550 million. The cash balance is at $1.8 billion. The cash flow from operations for 2Q 2013 was at $342.8 million versus a negative $86.8 million in 2Q 2012.

Sembcorp Marine will be paying out an interim dividend of 5.0 cents per share, the same amount as paid in 1H 2012.

The company foresees the fundamentals for the offshore and marine industry remain stable due to high oil prices and projected increases in offshore exploration and production spending.

The demand for rigs is projected to remain strong but competition from the Chinese and Korean yards will impact its margin. There is continued demand for repairs in the niche segments of liquefied natural gas carrier repairs, life extension work and upgrading of offshore vessels and cruise ships, despite the challenging shipping market environment.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.