Singaporean rig builder Sembcorp Marine Ltd swung into the red in the second quarter, and cautioned a trend of negative operating profit would continue in the near term as overall business volume remains low.
It turned in a loss of S$55.6 million ($40.68 million) for the three months ended June, compared with a profit of S$5.1 million in the same period a year ago.
Sembcorp Marine, majority owned by industrial conglomerate Sembcorp Industries Ltd, saw its revenue more than double to S$1.63 billion due to revenue recognition on delivery of some rigs. But it had to take a S$27 million loss on the sale of one of its rigs, dragging it into the red.
“Work volume for the foreseeable quarters, while improving, is expected to remain low, and the trend of negative operating profit will continue for the current financial year before improving thereafter,” President and Chief Executive Wong Weng Sun said on Friday.
While higher oil prices are prompting an improvement in spending on global exploration and production, offshore rig order recovery will take some time as the market remains oversupplied, particularly for jack-up rigs, the company added.
It said it was actively responding to enquiries and tenders for projects in the floaters, production platforms, gas solutions and specialised shipbuilding segments to further develop and strengthen its order book.
Sembcorp said there would be no interim dividend for the first half of the year, versus a dividend of 1 Singapore cent per share in the corresponding year-ago period.
The company’s year-ago results have been restated due to the adoption of the Singapore Financial Reporting Standards.