OREANDA-NEWS. Sembcorp Marine achieved a 2% year-on-year increase in net profit from USD 130 million to USD 132 million for the three months ended September 30th 2014 despite a challenging macro environment.

Group turnover for the third quarter of 2014 grew 3% year-on-year to USD 1.71 billion, which compares with USD 1.66 billion for the corresponding period in 2013. The higher revenue came mainly from increased contribution from the Group's rig building activities and from offshore platform projects.

Gross profit for the three months grew 14% to USD 205 million from USD 180 million previously, EBITDA (earnings before interest, tax and depreciation) rose 3% to USD 200 million while operating profit increased 3% to USD 171 million.

For the nine months to September 2014, Group net profit increased 3% to USD 386 million from USD 373 million with Group turnover rising 14% to USD 4.39 billion. Group gross profit increased 19% to USD 569 million, while EBITDA grew 5% year-on-year to USD 558 million, while operating profit grew 4% to USD 475 million.

Turnover for the Rig building sector increased 23% year on year from USD 2,367 million to USD 2,905 million for the nine months to September. The Group delivered six jack-up rigs for the nine month period, with another eleven in the work in progress or planning and engineering stage.

Offshore and Conversion/ Fixed Platform revenue declined 29% from USD 283 million in 9M 2013 to USD 202 million in 9M 2014, while Ship repair revenue was 10% lower at USD 465 million in 9M 2014 compared with USD 518 million in the corresponding period in 2013 due to timing in recognition of repair projects.

3Q 2014 VERSUS 3Q 2013

On a quarterly basis, Group turnover for 3Q 2014 at USD 1,712 million was 3% higher as compared with USD 1,659 million for the same period in 2013.

Group gross profit of USD 205 million was 14% higher on year-on-year basis while operating profit was 3% higher at USD 171 million, mainly due to foreign exchange differences.

Group pre-tax profit was 1% higher at USD 172 million impacted by lower associate and joint venture contributions and higher finance expenses.

Net profit in 3Q 2014 grew 2% year-on-year to USD 132 million compared with USD 130 million in 3Q 2013, largely due to higher profit contribution from the Group's rig building and fixed platform segments.

The Group's first drillship Arpoador sails away on board the Black Marlin to SCM's subsidiary Estaleiro Jurong Aracruz's yard in Brazil for full completion and remains on schedule for delivery in June/July 2015.

OUTLOOK

The Group has a net order book of USD 12.6 billion with completion and deliveries stretching into 2019. This includes a total of USD 4.2 billion in new rig and offshore conversion contracts secured since the start of 2014, but excludes repair and upgrade contracts.

Despite the current low oil price environment, the Group believes long term fundamentals driving the offshore exploration and production (E&P) market remain stable. The Group continues to receive enquiries for high specification, harsh environment jack-up drilling units and next generation deepwater and ultra-deepwater floaters. However reduction in capex spending could impact new orders and keen competition continues to exert pressure on margins.

The Group remains well positioned - having built a broad product offering, a strong execution track record and state-of-the-art facilities at its Sembmarine Integrated Yard @ Tuas (SIY@Tuas). The four new dry docks continue to see high utilisation for vessels undergoing repair, conversion and new buildings. With its broad range of capabilities and leading edge technology, the SIY@Tuas yard has positioned the Group for long term sustainable growth.

Sembcorp Marine's wholly owned shipyard in Brazil, Estaleiro Jurong Aracruz, commenced initial operations in 2H 2014, with construction completion scheduled for 2015.