Sembcorp Marine bleeds red ink for third consecutive year

Singapore’s leading offshore and marine contractor Sembcorp Marine has posted its third consecutive annual loss, sparking concern about the finances of the company that earlier this year completed the S$4.5 billion (US$3.4 billion) acquisition of compatriot and former rival Keppel Offshore & Marine.

Sembmarine informed the Singapore Stock Exchange (SGX) that it had recorded pre-tax losses for the three most recently completed financial years, based on audited consolidated accounts. Fortunately for the company, its market capitalisation — which averaged S$4.77 billion daily over the past six months — is sufficient to keep it from being added to SGX’s watchlist.

Sembmarine said it wished to draw investors’ attention to Rule 1311(1) of the exchange’s Listing Manual that states it will place an issuer on a watchlist if it posts three consecutive annual pre-tax losses and has an average daily market cap of less than S$40 million for the previous six months.

Sembmarine has embarked on a strategic review following its purchase of Keppel O&M that Sembmarine chief executive Chris Ong earlier said would have a key focus on the company’s plans to return to profitability as soon as possible. The offshore and marine contractor posted a net loss of S$118.3 million for the six months ended 31 December 2022 compared to a S$523.3 million net loss in the same period one year prior although revenues fell to S$852.2 million from S$1.02 billion.

Sembmarine, which is proposing changing its name to Seatrium, has a current net order book worth S$18 billion comprised of 40 ongoing projects including for the oil, gas, LNG, renewables and low-carbon energy sectors post the Keppel O&M acquisition.