SembE&C’s turnover rose 33% to S$1.1 billion, doubling PATMI to S$0.8 million, while the orderbook stood at a healthy S$2.3 billion.
In 2005, SembCorp Engineers and Constructors’ (SembE&C) turnover rose 33% to S$1.1 billion, doubling Profit After Tax and Minority Interest (PATMI) to S$0.8 million.
During the year, we secured S$874 million of new orders to take our orderbook to a healthy S$2.3 billion as of
end December 2005. As a result of SembE&C’s intensified efforts to pursue more overseas contracts, a larger 66% of our orderbook was made up of overseas projects, compared to 59% in 2004.
Similarly, process engineering jobs made up two-thirds
of the orderbook, reflecting SembE&C’s primary focus
on process engineering, which has been a mainstay
of the business since 2004.
In December 2005, subsidiary SembCorp Simon-Carves successfully secured a S$400 million contract to construct a 400,000 tonnes per annum Low Density Polyethylene
(LDPE) plant for chemical producer Huntsman on Teesside, UK. This contract was a follow-up to the earlier contract awarded in January for the design of the same plant, expected to be the largest single-stream LDPE facility
in the world.
Having supplied 75 LDPE stream facilities around the world, including six of the 11 most recently commissioned, SembCorp Simon-Carves is recognised as the world’s most experienced process engineering contractor for the design and supply of LDPE plants.
Another significant contract secured in 2005 was the S$198.6 million contract to build an additional facility adjacent to the oil refinery that we are currently building
for Essar in India. The project is expected to complete
in December 2006.
The global construction market is expected to be relatively positive as sustained oil prices, a recovering Japanese economy along with a dynamic US economy are expected to continue to spur infrastructure investments worldwide.
Notwithstanding the stable and positive global
construction outlook, we continue to face margin
pressure as more construction firms from China and
India, advantaged by their lower cost base, compete
to gain a foothold in the international arena.
Moving forward, we will press on with our strategy
of focusing on overseas markets, especially those
in China, India, Southeast Asia and the Middle East,
where strong growth potential is evident. We will also continue to concentrate on process sectors, especially
the petrochemical and oil and gas industries where high oil prices act as a driver for added investments. We will
do so by capitalising on our extensive process engineering track record and our reputation as an international leader
in process engineering design and construction.
To increase overall profitability, we will strive towards improving our project execution through stringent
cost controls and the continuous strengthening of
risk management processes.
Total orderbook as at December 31, 2005: S$2.3 billion
|Significant contracts in orderbook
||Remaining contract value
|Circle Line Contract 856
|| Dec 2006
|| Jun 2006