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Sembcorp posts 32% drop in profit for 2015

Losses by its rig-building arm overshadowed a strong performance by its utilities business.

SINGAPORE: Sembcorp Industries on Wednesday (Feb 17) reported a 32 per cent drop in net profit to S$548.9 million for 2015. Its net profit for the final quarter of 2015 was S$60.8 million, down from S$240.6 million in the same period of the year before. Sembcorp's turnover, meanwhile, fell 12 per cent to S$9.5 billion.

In a press release, the company attributed the loss to the performance of its Marine division, which posted a S$327.5 million loss in the fourth quarter of 2015. This is on the back of write-downs of inventories and work-in-progress, provision for foreseeable losses and customer deferment requests for rig building projects.

However, Sembcorp said the division was "sufficiently prepared, not just to ride through the storm, but to lay stronger foundations for the future when the market recovers".

It added that its Marine business will continue to "actively manage its balance sheet and maintain a healthy financial position". 

Sembcorp said its Utilities business performed well, with a 72 per cent on-year growth in net profit to S$701.5 million. The Group said this was pinned by growth from the business' overseas operations, as well as gains from the sale of its Australian waste management joint venture and municipal water operations in the UK and China. 

"Over the last few decades we have built a strong income base in our Utilities business," said Sembcorp Industries' Group President and CEO Tang Kin Fei. "Although the Marine business currently faces a challenging period and uncertainties in Brazil, we remain confident in the long-term fundamentals for the offshore and marine industry."