Sembcorp Industries’ Q3 profit falls 56% amid marine slump

SINGAPORE – Conglomerate Sembcorp Industries on Thursday (Oct 27) reported third-quarter net profit more than halved compared to the corresponding period a year earlier, hurt by the slump in its marine subsidiary, and warned of challenging times ahead.

For the three months ended Sept 30, net profit fell 55.9 per cent to S$53.9 million from S$122.3 million in the year-ago period, Sembcorp said in an aftermarket filing with the Singapore Exchange. Revenue for the period fell 10.8 per cent to S$2.1 billion, as turnover in its marine operations, mainly from its 61 per cent stake in Sembcorp Marine, slumped 21 per cent to S$887.9 million. Turnover at its utilities segment rose 3 per cent to S$1.2 billion, while its urban development segment suffered a 17 per cent drop in takings to S$1.3 million.

“Marine’s net profit for the third quarter decreased mainly due to lower contribution from rig-building projects resulting from customers’ delivery deferment requests. The share of losses from associates, higher finance costs, foreign exchange translation and impairment of available-for-sale financial assets had contributed to the net loss,” Sembcorp said.

In its utilities business, operations in India, China and the Middle East improved from the year-ago period, while net profit from the rest of Asia declined mainly due to the absence of contribution from SembSita Pacific, an investment holding entity for an Australian integrated waste management business which was divested in the fourth quarter of last year.

Looking ahead, Sembcorp said the market environment remains challenging, with the global oil and gas industry subdued and uncertain while the Singapore utilities business continues to face intense competition in the power market.

Sembcorp shares rose 1.2 per cent to close at S$2.48 on Thursday. The shares have fallen 18.7 per cent this year, compared to the 1.9 per cent drop in the Straits Times Index.