Sembcorp Marine's 2012 profit sank 28% to $538.5m

Despite revenue climbing 12%.

According to Nomura, Sembcorp Marine reported a 27% y-y decline in 4Q12 net profit of SGD 167.1mn, slightly below consensus estimate of SGD 174mn. Excluding a SGD 41mn tax provision write-back, 4Q12 net profit would have been SGD 126mn, lower than consensus (SGD 174mn) and estimate of SGD 139mn.

However, SMM’s reported 4Q12 pre-tax profit of SGD163mn was largely in line with estimate of SGD 168mn. For the full year 2012, the company reported PATMI of SGD 538.5mn down 28% y-y despite revenue increase of SGD 12%.

Here's more from Nomura:

Results for the year were also impacted by forex loss of SGD 23.9mn and fair value adjustment gain on hedging instruments of SGD 1.6mn.

The strong rise in 4Q12 revenue, up 38% on y-y basis was attributable to higher revenue recognition for rig building and offshore platforms with both rig building and offshore and conversion segments witnessing ~45% growth during the quarter.

Group gross profit for the quarter and full year were lower on account of margin recognition from new design rigs being lower. 4Q12 EBIT margins slipped to 10.8% (20.2% in 4Q11 and 14.2% in 3Q12) as the group booked initial revenue recognition for its first drillship for Sete Brasil.

FY12 EBIT margin came in at 12.5%, within management’s guided range, although down sharply from 18.6% in FY11.

Results for the quarter were boosted by SGD 41mn write-back of over provision of tax in respect of previous years resulting in tax credit of SGD 17.8mn. The overprovision was largely attributable to gain on disposal of equity investments recorded in previous years.

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