Sembcorp Marine Quarterly Profit Falls 15% as Sales Decline

Sembcorp Marine Ltd. (SMM), the world’s second-biggest oil-rig maker, reported a 15 percent decline in second-quarter profit after sales fell as the company was yet to begin work on orders won last year.

Net income in the three months ended in June fell to S$149.7 million ($124 million) from S$176.1 million a year earlier, the Singapore-based company said in a statement to the city’s stock exchange today. Sales declined 24 percent to S$831.3 million.

Sembcorp Marine said it expects energy companies to raise spending on exploration and production this year on fuel demand from emerging economies. The company has bagged S$2.6 billion of new contracts this year as higher crude oil prices spur demand for drilling equipment.

The rig-maker dropped 1.9 percent to S$5.3 at close of trading in Singapore before the earnings were announced. The stock has risen 3 percent this year, compared with little change in the benchmark Straits Times Index.

“New jackup rigs secured since the fourth quarter of last year are still in the planning stage,” Sembcorp Marine said in the statement.

The company has an order backlog of S$5.7 billion, and deliveries will extend to 2014, it said in the statement.

Sembcorp Marine’s operating profit margin widened to 19 percent in the second quarter, from 18 percent a year earlier, according to the statement.

Keppel Corp., the world’s largest oil-rig maker, last month reported second-quarter profit that exceeded analysts’ estimates. Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said yesterday it plans to drill more than 1,000 offshore wells in 2011-2015.

Sembcorp Marine’s Jurong Shipyard unit signed two contracts valued at $444 million to build two jackup rigs for a subsidiary of Noble Corp., it said in a statement earlier today. Noble also secured options for two more units, Sembcorp Marine said.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.