Sembcorp: “The fundamentals driving the offshore oil industry remain intact”

SINGAPORE (Dow Jones)–Sembcorp Marine Ltd. (S51.SG) said Tuesday its second-quarter net profit fell 15% from a year earlier because of a sharp contraction in sales, but the company flagged a positive outlook for the offshore oil and gas industry.

Net profit for the three months ended June 30 was S$149.7 million, down from S$176.1 million a year earlier, the world’s second-largest builder of offshore oil rigs by volume said in a statement to the Singapore Exchange.

“The fundamentals driving the offshore oil industry remain intact with exploration and production spending by oil majors and national oil companies expected to increase in 2011. Increased spending is expected for deepwater activity, driven largely by investments in Brazil, West Africa and Asia,” the company said in the statement.

Sembcorp Marine is the marine engineering arm of conglomerate Sembcorp Industries Ltd. (U96.SG).

Sembcorp Marine’s group turnover fell to S$831 million, down 24% from S$1.1 billion a year earlier as most of the new rig building projects secured since the fourth quarter of last year are still at the planning stage and didn’t contribute revenue in the quarter.

Sembcorp Marine has an order book worth S$5.7 billion, with deliveries scheduled through 2014. The company has received new orders worth S$2.6 billion so far this year, according to the statement.

-By Gaurav Raghuvanshi; Dow Jones Newswires

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