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SEMBCORP Marine is keeping an eye out for acquisitions in Brazil. 'We are looking for acquisition opportunities,' it said at its second-quarter results briefing yesterday.
For Q2 ended June 30, SembMarine posted a 7.6 per cent increase in year-on-year net profit to $138 million, up from $128.3 million a year back.
Turnover was 8 per cent higher at $1.5 billion, up from $1.38 billion previously, due to higher rig building activity.
Group operating profit was $166.7 million - a full 50 per cent higher than $111.5 million in Q2 2008. And operating margin was 11 per cent, up from 8 per cent.
Earnings per share came in at 6.71 cents, versus 6.23 cents a year earlier.
Contributions from associates and joint ventures were 69 per cent lower at $12 million, as Cosco Shipyard Group's contribution slid 71.4 per cent to $10.2 million. Sembcorp Marine has a 30 per cent stake in Cosco.
Revenue from ship repair dropped 11.1 per cent year-on-year to $173 million, while that from rig building jumped 19.6 per cent to $1.03 billion. Revenue from ship conversion and offshore business was also down, falling 10.3 per cent to $280.4 million.
For the first half, net profit grew 17.6 per cent to $258.3 million, as turnover surged 24.3 per cent to $2.86 billion.
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SembMarine has a net order book of $7.91 billion, with completion and deliveries stretching until early 2012. This includes $1.12 billion of orders chalked up year to date.
These orders comprise building up two semi-submersible rigs from bare-deck hulls for subsidiaries of SeaDragon Offshore, two offshore platforms for Premier Oil Natuna Sea and a floating production storage and offloading (FPSO) conversion for Modec.
SembMarine's directors have recommended an interim one-tier tax-exempt dividend of five cents a share, payable on Sept 1.
Looking beyond the current downturn, the longer-term fundamentals of the marine and offshore industry remain resilient, especially with oil prices now hovering in the US$60-US$70 a barrel range, SembMarine said.
But it acknowledged that near-term prospects for ship repair are 'challenging'.
A bright spot is that its bigger docks are well booked thanks to regular customers, as well as a focus on liquefied natural gas carrier repairs, which is a niche market.
'The market for FPSO units and production platforms is expected to remain unchanged, as these projects have longer gestation periods,' SembMarine said.
Separately, it said that its wholly owned subsidiary Jurong Shipyard has landed a $160 million contract to convert a very large crude carrier into an FPSO unit for Modec Offshore Production Systems (Singapore).
The FPSO, due for delivery in Q1 2010, will service the Jubilee field off Ghana, West Africa.
SembMarine expects the conversion contract to contribute to earnings in the year ending Dec 31, 2009.
The company's shares closed unchanged at $3.18 yesterday.
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