Fabricator Sembcorp Marine has run into costs that will have a “material adverse impact” on the group’s half-year 2021 results.
The Singapore-based company, which is active in renewables, said that Covid-19, labour shortages and supply chain constraints will see it deliver a six-month loss in the same order as last year’s full-year S$583m (€364m) net loss.
Recruitment from “non-traditional sources is costing it “more than twice” the traditional hiring method due to higher wages and “costly” upfront Covid-related costs such as a five-week quarantine.
These costs will be incurred for the next six to 18 months, it said. Most of the outfit’s projects are “delayed by at least 12 months”.
“Arising from the delays in project execution, the group also expects to incur additional costs due to work re-scheduling, extra sub-contract work, additional material usage and other staff turnover related costs,” added a statement today.
“These provisions will have a material adverse impact on the Group’s 1H2021 results. As at the date of this release, the Group expects that losses for 1H2021 are likely to be in the region of the full year losses incurred for FY2020.”
Sembcorp Marine reported a S$583m (€364m) net loss for 2020.
Half-year results will be published on 29 July.