Singapore’s Swiber has taken a hit as revenue from existing production dropped, while new contracts failed to bridge the gap.
Revenue has taken a dive over the half-year to the end of June 2014, with the company taking in $418 million over the period. This is a massive drop on the same period in the previous year, when the company took in $551 million.
The company said revenue from the new contract awards has not started yet and thus has not contributed to this half-year.
About $315 million worth of new contracts were won during the year-to-date, which includes engineering, procurement, installation and construction projects across southeast Asia and Latin America.
Corresponding with this drop in revenue has been a drop in costs for the company, which decreased from $464.8 million in the first half-year of 2013 to $392.8 million this year.
As part of the company’s streamlining of costs, administrative expenses dropped from $32.7 million to $29.9 million over the same period.
While revenue took a hit over the half-year, profit skyrocketed by 68.3% over the same period due to lower operating costs, increases in operating incomes and better returns on joint venture projects.
The company posted a profit of $62 million for the half-year to the end of June, up from the $37 million profit book in the corresponding period the year before.
Swiber chief executive Francis Wong said the company was “riding the wave” of strong growth in the offshore industry.
“We have been actively bidding for major projects in our existing and target markets in Asia Pacific, Middle East, Latin America and West Africa,” he said.
“We have stepped up our business development efforts in Latin America and landed several contracts earlier in 2014 for subsea development and other projects in this market.
“Barring any unforeseen circumstances, the group expects to see an improvement in our order book over the next two quarters.”
According to the company, expenditure by exploration and production companies is expected to be healthy, while Asia is set to account for a large part of that demand.
Emerging markets like West Africa are also expected to have strong demand, as well as Latin America.
“Besides focusing on our core markets in Asia Pacific, the group is moving swiftly to strengthen our foothold in other growth markets such as Latin America.
“With a significant portion of projects commencing in the fourth quarter of 2014, the group expects the last quarter to be higher compared to the first three quarters of 2014.”