OREANDA-NEWS.   Sembcorp Marine recorded a full year net profit of USD 556 million amid a challenging operating environment in 2013. Earnings per share for the Group were 26.6 cents while Return on Equity was 22%.
Group net profit at USD 556 million in 2013 was 3% higher as compared with USD 538 million a year ago.  On a quarterly basis, 4Q 2013 net profit at USD 182 million was 9% higher as compared with USD 167 million in 2012.   Excluding the non-operating items, the Group’s net profit at USD 553 million in 2013 was 11% higher as compared with USD 500 million in 2012 while net profit in 4Q 2013 at USD 182 million was 45% higher than the USD 126 million recorded for the corresponding quarter last year.

Group operating profit in 2013 increased 16% to USD 644 million from USD 554 million in 2012.  On a quarter to quarter basis, operating profit in 4Q 2013 at USD 188 million was 27% higher as compared with USD 148 million in 4Q 2012.

Group turnover for 2013 was USD 5,526 million representing a 25% increase as compared with USD 4,430 million in 2012.  Overall, the higher turnover was attributable mainly to higher revenue recognition with more rig building projects achieving initial progressive recognition in 4Q 2013 resulting in  a  23% increase in turnover from USD 1,378 million in 4Q 2012 to USD 1,693 million in 4Q 2013.

For the rig building sector, 4Q 2013 turnover at USD 1,197 million was 38% higher as compared with USD 870 million for the same period in 2012.  The increase was attributable to the initial recognition of the second unit of the Group’s repeat drillship design, one accommodation semisubmersible rig and two jack-up rigs.  On a FY 2013 basis, turnover increased 51% to USD 3,564 million as compared with USD 2,356 million in 2012.   A total of eight jack-up rigs comprising of diverse designs were delivered during the year.  These deliveries include four jack-ups from the Group’s proprietary Pacific Class 400 design series, two Friede & Goldman JU3000N design rigs and two remaining units based on the Friede & Goldman JU2000E design.

The ship conversion and offshore sector registered a 5% decline in turnover from USD 330 million in 4Q 2012 to USD 314 million in 4Q 2013 attributable to the timing of projects that achieved progressive revenue recognition during the period.  For FY 2013, it was 14% lower from USD 1,395 million in 2012 to USD 1,204 million.  The decline was due to the timing of projects coupled with lesser number of projects that achieved progressive revenue recognition during the year.

Turnover from the ship repair sector in 4Q 2013 was USD 163 million as compared with USD 167 million for the same period in 2012 due mainly to the timing in recognition of the repair and upgrade projects.  For FY 2013, it was USD 681 million, a 6% increase as compared with USD 642 million in 2012.

DIVIDEND

The Board of Directors are pleased to recommend a total final one-tier tax-exempt cash dividend of 8 cents per share for the financial year ended 31 December 2013 comprising:

i)             A final ordinary one-tier tax-exempt cash dividend of 6 cents per share &
ii)            A final special one-tier tax-exempt cash dividend of 2 cents per share

Including the interim one-tier tax-exempt cash dividend of 5 cents per share paid on 29 August 2013, the total dividend will be 13 cents per share, which translates to a payout ratio of 49% for 2013.

The proposed final and special cash dividend, if approved at the Annual General Meeting to be held on 22 April 2014, will be paid on 14 May 2014.

OUTLOOK

The Group has a net order book of USD 12.3 billion with completion and deliveries stretching into 2019.  This includes USD 4.2 billion in contract orders secured in 2013, excluding repair and upgrade contracts.  

The global economy remains fragile and uncertain.  Amid the volatile economic conditions and a competitive landscape, the Group remains focused on its core business.  Moving ahead and in anticipation of the tight labour supply situation, the Group will further improve operational efficiency, productivity and safety management as well as ensure timely delivery of projects to its customers, although margin remains challenging.

Demand remains strong for Sembcorp Marine’s big docks, including the four VLCC drydocks that commenced operations at the Group’s new 73.3-hectare Sembmarine Integrated Yard @ Tuas Phase I facility in August 2013.  The new yard will position Sembcorp Marine for long-term sustainable growth with its innovative design, advanced automation and optimised facilities. It will enable the Group to utilise its workforce and resources more effectively to achieve higher productivity and faster turnaround.  Geared to meet the stringent safety and quality requirements of vessels and to comply with new regulatory and environmental standards, the integrated yard is well-equipped to provide innovative solutions to serve the growing needs of customers.