SembCorp industries posts 56% drop in third quarter profits

SembCorp posted a Q3 net profit of S$53.9 million, down from S$122.3 million a year ago.

SembCorp industries posts 56% drop in third quarter profits
A Sembcorp employee stands near the turret of Tullow Oil's newly completed Floating Production, Storage and Offloading vessel (FPSO) Prof. John Evans Atta Mills at Sembcorp Marine's Jurong Shipyard in Singapore January 20, 2016. REUTERS

SembCorp Industries said on Friday net profit for the third quarter plunged 56 percent following a string of poor performances in most of its business divisions.

SembCorp posted a net profit of S$53.9 million, down from S$122.3 million a year ago, for the quarter ended September 30. Revenue for the period fell 10.8 percent to S$2.1 billion, SembCorp said in a filing with the Singapore Exchange.

"Sembcorp's diversified portfolio gives us strength and resilience as a Group. Our Utilities business delivered a healthy performance in 9M2016. The business' net profit was up 11% excluding divestment gains recorded the previous year. Overseas Utilities operations delivered a 20% net profit growth," Tang Kin Fei, Group President & CEO of Sembcorp Industries, said in a statement.

Earlier this week, SembCorp Marine reported a net loss of S$21.8 million in the third quarter, reflecting a hit on business on account of the sustained downturn in the oil and natural gas market.

The rig builder said it was cutting as many as 8,000 jobs and putting in place a salary freeze for the management staff.

The poor performances have come in the backdrop of the crisis companies in the offshore and marine industry in Singapore are facing in the wake of the continued oil market downturn.

Marine services companies like Sembcorp Marine and Keppel Corp, as well the shipbuilding and offshore support companies, have been severely affected by this.

"Marine's net profit for the third quarter decreased mainly due to lower contribution from rig-building projects resulting from customers' delivery deferment requests. The share of losses from associates, higher finance costs, foreign exchange translation and impairment of available-for-sale financial assets had contributed to the net loss," Sembcorp said in the statement.