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Sembcorp Marine posts 3% profit rise amid "challenging environment"

Singapore's Sembcorp Marine, the world's second largest maker of offshore oil rigs, posted a 3-per cent rise in first quarter net profit amid what it described as a "challenging operating environment".

SINGAPORE: Singapore's Sembcorp Marine, the world's second largest maker of offshore oil rigs, posted a 3-per cent rise in first quarter net profit amid what it described as a "challenging operating environment".

"While enquiry levels remain healthy, competition is keen and intense, exerting pressure on margins," Sembcorp said in a statement on Friday.

Sembcorp earned S$122 million in the three months ended March, up from S$119 million in the same period a year ago.

Group turnover for the first quarter increased 27 per cent year-on-year to S$1.34 billion, due mainly to higher revenue recognition from rig building activities and offshore platform projects.

Sembcorp and Keppel Corp, the world's biggest oil rig maker, are facing increased competition as rival yards in South Korea and China diversify from shipbuilding to oil rigs.

Sembcorp said the long-term fundamentals driving the offshore exploration and production market remain stable, underpinned by firm oil prices.

The group has a net order book of S$12.9 billion with completion and deliveries stretching into 2019. The figure includes the S$1.6 billion in new rig orders secured since the start of 2014. 

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