SINGAPORE (Mar 6): Despite an uptick in crude oil prices in 2019, a recovery in oil exploration and production activity was somewhat limited. This inevitably prolonged the downturn in the oil services industry, which has seen a glut of rigs and offshore platforms. Given the challenging environment, Sembcorp Marine (SembMarine) had to endure another difficult year.
For FY2019 ended Dec 31, SembMarine reported a y-o-y revenue decline of 41% to $2.88 billion. This came on the back of lower revenue recognition from rigs and floaters and offshore platform projects. As a result, the company remained in the red and posted a wider loss of $137.2 million. The accelerated depreciation of the company’s Tanjong Kling Yard also did not help.
SembMarine’s underlying problem largely lies with the company’s difficulty in finding new jobs. Last year, the company managed to secure new contracts worth only $1.49 billion. This was up 26.3% from $1.18 billion the year before. While the increase in new contracts is commendable, it is a far cry from the amount of new contracts it had obtained prior to 2015.