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Sembcorp Marine issues consecutive loss notice

By: Tom Russell 31/03/2021 Sembcorp Marine

Corporate General

Singapore-headquartered engineering firm Sembcorp Marine has issued a notice of three years recording consecutive pre-tax losses. The firms latest 6-month average daily market capitalisation was S$1.892 billion which prevents it from being place on the Singapore Exchange (SGX) watchlist.

In its 2020 results the company reported that full-year revenue was S$1.51 billion, 48% lower than revenue booked the prior year. With the decline in revenue, and including asset impairments and provisions made in 4Q 2020, the Group registered a higher net loss of S$583 million for the full year (FY 2019: S$137 million loss).

Sembcorp Marine operates shipyards and facilities in Singapore, Indonesia, the United Kingdom, Norway and Brazil. It provides engineering solutions for the offshore, marine and energy industries with a focus on four key capabilities including rigs & floaters, repairs & upgrades, offshore platforms and specialised shipbuilding.

The company stated that in 2020 it had a difficult year battling the challenges brought on by the COVID-19 pandemic. Singapore’s COVID-19 containment measures, implemented in April, led to extended production stoppages and consequent delays in project execution and completion. Production activities resumed gradually from early July 2020 to reach almost full workforce levels near the end of November. Group revenue was severely hit by project stoppages and delays.

Sembcorp Marine started 2020 with a net order book in excess of S$2.0 billion with completion and deliveries stretching into 2022. However, the pandemic-led slowdown resulted in a push-out of delivery dates for most ongoing projects, with some rescheduled by as much as 12 months.

Over the past several years, the Group has strategically shifted the focus of its efforts and resources to the emerging green opportunities in the global offshore, marine and energy value chain.

As of 31 December 2020 the company has a number of offshore wind related projects under execution. This includes the construction of wind turbine jacket foundations for the Formosa 2 offshore wind farm in Taiwan under a contract with Jan De Nul. In the UK, Sembcorp Marine is completing the fabrication of the Offshore Substation (OSS) and Reactive Compensation Station (RCS) topsides for the Hornsea 2 project in the UK.

Earlier this week, Sembcorp Marine announced alongside GE Renewable Energy’s Grid Solutions it has secured a contract from RWE Renewables, to supply the high voltage direct current (HVDC) electrical transmission system for the Sofia offshore wind farm. Sembcorp Marine’s scope of work includes the design, construction, installation and commissioning of the offshore converter platform.

Sembcorp Marine stated that it expects losses to continue. However, the group will continue its strategic initiatives to build business resilience and position itself for future growth.

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Sembcorp Marine issues consecutive loss notice

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