Singaporean rig builder Sembcorp Marine Ltd said on Wednesday first-quarter profit fell 86 percent, and signaled a subdued outlook for orders and business volumes.
Sembcorp Marine said profit came in at S$5.3 million ($4 million) for the three-month period ended March, compared with S$37 million in the same period a year ago.
The year-ago profit was boosted by an one-off gain from the disposal of Sembcorp Marine's stake in Cosco Shipyard Co.
Overall business volume has remained significantly below peak levels, resulting in operating losses in the latest quarter, Chief Executive Wong Weng Sun said.
"Based on current secured orders, work volume for the foreseeable quarters is expected to remain low, and the trend of negative operating profit may continue," he said.
Sembcorp Marine's net order book stood at S$4.59 billion, excluding the orders for drillships from rig leaser Sete Brasil, which has filed for bankruptcy protection.
Recovery in rig orders is expected to take some time as most of the drilling segments remain oversupplied, with day rates and utilisation under pressure, the company said in a statement on Wednesday.
Orders at the company and bigger rival Keppel Corp slumped over the last two years on lower oil prices and an oversupply of rigs, but some analysts have been expecting the market to bottom out.
The company, majority owned by industrial conglomerate Sembcorp Industries Ltd, said revenue rose 58 percent to S$1.18 billion. The company's year-ago results have been restated for accounting changes.
($1 = 1.3262 Singapore dollars)
(Reporting by Aradhana Aravindan; Editing by Biju Dwarakanath)
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