Sembcorp Marine Ltd. (S51.SG) second-quarter net profit unexpectedly fell from a year ago, primarily because of a foreign-exchange loss.
Net profit for the April-to-June quarter stood at 5.6 million Singapore dollars (US$4.12 million) from S$11.5 million a year earlier.
Continue Reading Below
Sales turnover declined 28% to S$655.5 million a year ago, Sembcorp Marine said in a statement to the Singapore Exchange.
Sembcorp Marine was expected to post a net profit of S$30.1 million, according to FactSet.
Gross profit fell primarily because of lower contribution from rig building and offshore platform projects, while net profit was lower because of foreign-currency translation loss on the U.S. dollar-denominated debt for the Brazil yard.
Sembcorp Marine and its bigger local rival Keppel Corp. (BN4.SG) have been struggling to get new orders after oil prices fell from peak of 2014, forcing exploration and production firms to scale back investment.
The two Singapore companies are the world's largest builders of drilling rigs.
"Global exploration and production spending is expected to increase," Sembcorp Marine said. "We remain cautiously optimistic of new orders for production facilities in the next few years."
Sembcorp Marine said it has orders in hand valued at S$6.7 billion with deliveries and completion stretching to 2020.
Write to Saurabh Chaturvedi at email@example.com
(END) Dow Jones Newswires
July 27, 2017 06:40 ET (10:40 GMT)