Singapore's Sembcorp Marine Ltd. swung to a loss in the third quarter of 2016. The rig builder's revenue was hurt by customers deferring rig deliveries amid a protracted downturn in the oil and natural gas market.
The company posted a net loss of SG$21.8 million, or US$15.7 million, for the quarter, which ended Sept. 30. This compared with a net profit of SG$32.1 million one year ago. The bottom line was hurt by higher financing costs, share of losses from associates and foreign exchange impact, Sembcorp Marine said.
The company, majority-owned by industrial conglomerate Sembcorp Industries Ltd., said revenue dropped 21%.
Sembcorp Marine's net order stood at SG$8.4 billion. Excluding the orders for drillships from rig leaser Sete Brasil, which has filed for bankruptcy protection, the order book was worth SG$5.2 billion.
The rig builder said several rigs due for delivery have been deferred.
"We have taken steps to protect our interests and are evaluating other courses of action, including sale to third parties," Sembcorp Marine added.
Singapore's offshore and marine industry has been pummelled as clients cut spending to weather the slide in oil prices. This has hurt Sembcorp Marine and bigger rival Keppel Corp., as well the shipbuilding and offshore support firms that operate out of the Singapore hub.
Several companies, including Swissco Holdings and shipping trust Rickmers Maritime, are facing strain in meeting their debt commitments and are trying to restructure their bonds. Oilfield services firm Swiber Holdings was placed under judicial management earlier in October.
Perisai Petroleum Teknologi Bhd., a Sembcorp Marine customer, declared insolvency this month.
In a separate statement on Oct. 25, shipbuilder COSCO Corp. (Singapore) Ltd. said it expected to report a bigger third-quarter net loss due to cancellations of several orders and delivery extensions in many offshore projects. The company is scheduled to report results on Nov. 11. (US$1 = SG$1.3906)
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