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SEMBCORP POSTS LARGE LOSSES

Monday, July 20, 2020 

In the first half of 2020, Singapore's Sembcorp Industries posted a turnover of S$3.5 billion and a net loss of S$131 million, mainly due to losses in the Marine business.

The impact of Covid-19 on the global economic outlook and low energy prices impacted on the assessment of the recoverable amount of certain investments and assets. Exceptional items in 1H2020, including impairments of these investments and assets, amounted to a negative S$191 million. Without these exceptional items, underlying Group net profit was S$60 million.

As well as losses incurred in Sembcorp's energy business, and despite  profit growth in the urban sector, amidst difficult market conditions Sembcorp's marine business, turned in a loss of S$117 million to the Group in 1H2020. This was compared to a net loss of S$6 million in the corresponding period for the previous year and was mainly due to the Covid-19 pandemic delaying project executions, higher costs recognised for rigs and floaters and specialised shipbuilding projects, and lower margin recognition from offshore platforms. This was partly offset by profit from repairs and upgrades, government grants for the Covid-19 pandemic and foreign exchange gain.

Earlier, Sembcorp had announced the proposed recapitalisation of Sembcorp Marine, followed by a proposed demerger of the two companies via a distribution of Sembcorp Industries’ stake in the recapitalised Sembcorp Marine to Sembcorp Industries shareholders

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