Ladies and gentlemen, good evening, and welcome to Sembcorp Marine Full Year 2021 results presentation webcast. I'm Chua Mun Yuen from Sembcorp Marine Investor Relations and Corporate Communications. Thank you for taking time to join us this Friday evening. May I remind all that some of the statements made on the call today could be forward-looking in nature. A detailed disclaimer in this regard has been included in the press release. On the call today, we have Mr. Wong Weng Sun, President and CEO of Sembcorp Marine. He is joined by Mr. William Goh, Director, Group Finance of Sembcorp Marine. Without further delay, I would like to invite Mr. Wong to address the meeting. Mr. Wong, please.
Thank you, Mun Yuen. Good evening, everyone. Thank you for joining us at Sembcorp Marine full year 2021 results webcast. The fact that you are here at this webcast with management of Sembcorp Marine, I hope it means you are well and safe against the COVID-19 virus. Because of the pandemic, I believe you would agree with me that the past two years have been among the most challenging years in recent memory. The COVID-19 pandemic persisted, and we continue to face serious challenges in 2021. No one and no organization was unaffected. Likewise, Sembcorp Marine encountered execution challenges associated with the pandemic during the year. We have shared previously how our projects under execution faced shortages of skilled workers and supply chain constraints, which resulted in significant cost overruns. Despite these operational challenges, we completed four key projects and successfully delivered them to our customers.
While we managed to reduce our second half losses compared to the first half, our financial results for the full year reflected the continuing impact of the pandemic, which accounted for the significantly higher provisions for the manpower and other costs to complete our projects. While this pandemic has been challenging, it has given us the impetus to find solutions, new way to approach issues and take concrete steps to address each evolving challenge. We took active measures, work in even tighter cooperation with our customers and focus a new rhythm to manage the pandemic and our operation. The labor shortage situation also stabilized during the fourth quarter to enable smoother execution of projects. Sembcorp Marine remains committed to completing the remaining projects for our customers, even as we actively work on replenishing our order book.
You have seen the top and bottom line and the provisions of SGD 839 million for the year. William Goh, our Group Finance Director, will provide more details on our financial performance shortly. He will also share our cash flow situation and liquidity management. However, allow me to just say a few words on the rights issues. In June of last year, we issued an announcement on our SGD 1.5 billion rights issue aimed at addressing our immediate funding needs. The rights issue was successfully completed in September 2021. On behalf of Sembcorp Marine management and board, I would like to convey our appreciation to all our shareholders for their support. Firstly, for the rights issue resolution at the EGM, and then the subscription and the excess applications. Thank you.
The enhanced liquidity position through the recapitalization has enabled the group to meet its ongoing operational funding requirements and fulfill its existing commitments. A strengthened balance sheet will support our ongoing strategic expansion into the high-growth renewables and clean energy segments. I shall elaborate on this shortly. Importantly, it means greater financial agility for Sembcorp Marine to seize opportunities and to respond to evolving market dynamics, to bid competitively for high value and large-scale projects. We continue to keep our sights on our long-term strategic goals and pursuit. Let me now turn to a discussion of our operations. Despite extreme operational challenges encountered, Sembcorp Marine managed to complete a number of projects successfully in FY 2021 to date, including four key projects, namely fabrication of six production topsides, including wellheads and risers and four bridges for deployment to TotalEnergies Tyra redevelopment field.
Construction and integration of Vito Regional Production Facility, RPF. Topsides and living quarters with its four-column floating production unit, FPU hull for Shell Offshore Inc. for deployment to the Gulf of Mexico in the U.S. This landmark project achieved a first for the group, a mega block integration of Vito's RPF's topside and living quarters with the four-column FPU hull in a single lift with a pair of state-of-the-art goliath cranes with a 30,000 tons combined lifting capacity at Sembcorp Marine's Tuas Boulevard Yard. An EPC engineering procurement and construction new build FPSO, the Johan Castberg, complete with hull and living quarters to Equinor, slated for the deployment at the Johan Castberg field in the Barents Sea, Norway. Fabrication of 15 wind turbine jacket foundations for Ørsted's Formosa 2 offshore wind farm. Five jacket foundations have since sailed away, with the remaining awaiting client's availability.
Sembcorp Marine also completed major conversions for several offshore gas facilities. This includes a FSRU conversion for the 125 cubic KARMOL LNGT Powership Africa for KARMOL and a FSU conversion of the GasLog Singapore for GasLog. During the year, the group also delivered on some 90 projects requiring repair, damage repair, upgrade, refit, maintenance, as well as decontamination involving FPSO, FSO, FSRU, FSU, LNG plant and carrier, cruise ship, naval ship, heavy lift carrier, ballast water management system, and scrubber. For the ongoing project execution, with the progressive completion of this project, the group has freed up resources to focus on the remaining projects and to take on new projects. In September 2021, the group marked the commencement of the construction of the offshore converted platform for the Sofia offshore wind farm with a steel-cutting ceremony at its yard in Indonesia.
In August 2021, the group delivered the offshore substation and reactive compensation station topside to Ørsted. Following the successful installation of the facility at Hornsea 2 offshore wind farm in October 2021, offshore hookup and commissioning of the topsides had commenced in November 2021. At the end of the year, the group has a total of 16 projects under execution, with 12 scheduled for completion in 2022, and the remaining will progressively be completed from 2023 to 2025. For other notable projects, Sembcorp Marine through LMG Marin has secured a contract to design the world's first green ammonia-fueled tanker. The group is also working with its partners on a conceptual design of an ABS ammonia approved ammonia bunkering vessel. Sembcorp Marine is currently also constructing a 12,000 m³ LNG bunkering vessel.
The group is jointly developing hydrogen as a marine fuel with its partner and collaborating with two other partners to explore the feasibility of developing a groundbreaking sustainable ocean data center. Now, I would like to go to the net order book and new contracts. The group net order book currently stands at SGD 1.3 billion. This consists of SGD 1.1 billion of projects under execution, with a total original contract sum of SGD 6.1 billion and zero point two billion of ongoing repairs and upgrade projects. Approximately 43% of the group's net order book are for renewables and other cleaner and greener solutions sectors. The group is cognizant that new orders wins is critical to support its future performance and remain focused on clinching new contracts to replenish its order book.
The improving industrial outlook and then, on the back of the rising oil price, provide impetus for oil and gas companies to review plans for the resumption of deferred activities, final investment decisions, and capital expenditure. There are also improved prospects and opportunities as associated with the global transition towards cleaner energy and sustainable solutions. The group continues to actively attend to emerging tender opportunities in the renewable energy and gas solution segment. The group is also actively pursuing multiple projects covering FPSOs, FSOs, and FPUs with tenders in progress. The group has commenced work on the feed contract awarded by Altera Infrastructure in September 2021 for the development of an FPSO facility for the Dorado FPSO project. The group remains hopeful in securing the EPC contract for the project.
Negotiations are in progress with the Brazilian Navy on the construction of the Antarctic support vessel NApAnt, which is part of the Brazilian Navy research vessel project, with contract award expected in the first half of 2022. To date, the group's repair and upgrade business has secured advanced orders for the repair and upgrade of 13 LNG carriers and refit of three cruise vessels. The group is also working on active inquiries of FPSO and FSO upgrading projects. Sembcorp Marine has also secured green technology retrofit solutions: 10 projects relating to the installation of ballast water management system and scrubber, and identified opportunities in the sustainable repair and upgrading, such as air lubrication system and ammonia-based fuel solutions. Many of the projects the group is working on is expected to contribute to the decarbonization in the maritime industry. Some of Sembcorp Marine's past projects have won international accolades.
They include Ultramarine, a technologically advanced ice-class polar expedition cruise vessel, has won the Best Medium Cruise Ship award at the Baird Maritime World Ship of the Year Awards 2021. MF Hydra, the world's first zero-emission liquid hydrogen-powered RoPax ferry, has similarly won an award at the Baird Maritime World Ship of the Year Awards 2021 for the Best Medium Ro-Pax award. It has also been conferred the prestigious Ship of the Year award by Skipsrevyen, a 50-year-old Nordic maritime magazine publication house. Both vessels were designed by the group's subsidiary, LMG Marin, and are recognized for their environmentally sustainable design features. Let me now address the non-binding MoU the group has entered into with Keppel Corporation Limited in June 2021 to explore the potential combination of Sembcorp Marine and KOM, Keppel Offshore & Marine. We would like to update that the due diligence process is ongoing.
The group continues to work diligently towards a definitive agreement in the first quarter of 2022. In closing, allow me to reiterate, the group will need to complete and deliver a total of 12 existing projects in FY 2022, and provisions for cost to complete these projects have already been made in the prior year. The group is also on track to conclude negotiations on project completion terms with its customer. Barring any unforeseen event, this should continue positively. This should contribute positively to the group's result in the first half of 2022. The industry outlook for the oil and gas renewables and other green solutions continues to improve. It is important for the group to convert its order pipeline into firm contracts on a timely basis in FY 2022.
Taking these factors into account, the group expects its financial performance in FY 2022 to be significantly better than FY 2021. Now let me pass the discussion to William Goh, our Group Finance Director, who will share more details on our FY 2021 financial performance. Thank you. William, please.
Thank you, Mr. Wong. Let us go through quickly the numbers. For group revenue for the year, group revenue is at SGD 1.862 billion, which is an increase of 23% from the previous year. Net loss before provisions was SGD 332 million, which is a reduction of 24% from prior year. Factoring, of course, the provisions of SGD 839 million on the post-tax basis for this year, net loss for this year is SGD 1.171 billion. There has been no cancellation of any existing projects during the year. As at the end of 31st December 2021, net order book stands at SGD 1.3 billion. Just to give a bit more color on the SGD 839 million provisions that we made for the entire year.
The provisions for cost to be incurred, especially for completing the projects, the additional labor and other costs comes up to be SGD 696 million. We also cater for a couple of our yards reinstatement costs, a total of SGD 75 million. Asset impairment loss and project stock write down of SGD 68 million. In total, all three count to SGD 839 million. Going to the traditional metrics for turnover. First, on the second half performance, turnover is SGD 1.018 billion for second half of 2021. This compared with SGD 604 million in second half of 2020, an improvement of 69%. EBITDA is a SGD -416 compared to a SGD -308, an increase of 35%.
The loss before tax is SGD 527 million, compared with SGD 450 million loss last year, an increase of 17%. Net loss for the second half of the year comes in at SGD 523 million, compared with SGD 390 million last year, an increase of 34%. These numbers take into consideration the significant provisions that we made this year. If we were to exclude these provisions, the key numbers will show for gross loss in second half of the year at SGD 137 million. Compared to last year's second half of SGD 262 million, it is an improvement of 48%. At the EBITDA level, the second half this year is SGD 49 million loss compared to a SGD 146 million loss last year, an improvement of 66%.
At the net loss level, second half this year is SGD 156 million, compared with last year of SGD 246 million loss, an improvement of 37%. Let us see the equivalent numbers on a full year's basis. Turnover for a full year is SGD 1.86 billion, compared with SGD 1.51 billion last year, an improvement of 23%. At the net loss level is SGD 1.171 billion compared to SGD 583 million. There's a significant increase there. Again, as we exclude these material provisions, for the whole year, the gross loss is SGD 289 million, compared with SGD 456 million last year. It is an improvement of 37%. EBITDA is a SGD -101 million compared with last year of SGD 218 million, an improvement of 54%.
At the net loss level for the entire year, net loss is SGD 332 million compared with SGD 439 million last year, an improvement of 24%. Looking at our capital structure and our key metrics on the liquidity side. Shareholders' funds post our rights issue stands at SGD 4 billion compared with SGD 3.67 billion last year, an increase of 9%. At a net debt level, net debt at the end of FY 2021 stands at SGD 1.97 billion, compared with SGD 2.78 billion last year, a reduction of 29%. Net working capital is a positive of SGD 493 million, compared with a negative net working capital of SGD 259 million last year.
The net gearing ratio basis at the end of this year, it stands at 0.49x , a significant reduction from last year's 0.75x , arising largely from the rights issue. Let's move on to the other numbers in the next slide. In terms of cash flow, the cash flow used in operating activities this year is SGD -589 million. This is a reduction of 21% compared to the SGD 750 million last year. Net cash used in investing activities, mainly CapEx, is SGD 44 million this year compared with SGD 88 million last year. A reduction of 50%, again reflecting the prudent application of our limited resources to CapEx, where we have suspended all new CapEx and focus only on maintenance CapEx to ensure safety and operability of our yard facilities.
In terms of net cash flow from financing activities, mainly for our net proceeds on the rights issue, offset by net repayment of borrowings, it comes in this year at SGD 964 million compared to SGD 1.2 billion last year. Net increase in cash for FY 2021 comes in at an increase of SGD 331 million compared to last year's increase of SGD 387 million. The net cash balance at the end of the year stands at SGD 1.1 billion compared with SGD 772 million last year, an increase of 43%. Moving on to the business side of things. In terms of the revenue by segments, as you can see, the largest segment is from the floater segment, mainly production floater solution, which contributes 34% or SGD 643 million.
This is an increase of 24% from last year's SGD 517 million. The second largest segment is offshore platforms, and this is mainly the renewable energy, offshore wind, substation platforms and modules. This comes in at SGD 574 million, an increase of 85% compared to the SGD 310 million last year. The third largest segment is our repairs and upgrade segment, SGD 396 million this year. A slight reduction from the SGD 425 million last year. The other segment is from our advanced drilling rig solutions of 9% of our total revenue, SGD 160 million, relatively flat compared to last year's of SGD 156 million. Moving on to a bit more understanding on each of these key segments.
Looking at offshore platform, as we mentioned, it includes our renewable solution mainly for offshore wind. The increase of 85% is largely contributed by three key projects. Firstly, the Ørsted Hornsea Two offshore wind farm, the reactive compensation station topsides. The JERA Formosa 2 offshore wind farm projects. And thirdly, the RWE Renewables Sofia offshore wind farm. These are the three key projects that contributed largely to the revenue. Moving on to the next segment, repairs and upgrade. The revenue for repairs and upgrade declined slightly by 7% compared to the corresponding period last year. The number of vessels was slightly reduced and the overall lower value per vessel was experienced as well.
This is very much reflected by the increase in the COVID-19 restrictions, where many of our customers' vessels could not come in, because once they come in, they end up having to go through a lot of the COVID-19 measures for the right safety reasons. Because of that, they may be compelled to consider other locations. Moving on to the floaters, which is largely production floaters, FPSOs, and FPUs. Floaters revenue, as mentioned earlier, rose by 24% to SGD 643 million for FY 2021. The key projects that contributed to this revenue is the Johan Castberg new-build FPSO, the Shell Vito new-build FPU, as well as ongoing projects like the Courage new-build FPSO, the second Shell FPU, the Shell Whale, the P71 new-build FPSO, which was also repurposed by the end customer, and also Shapoorji Pallonji FPSO conversion.
For rig building site, it's basically our advanced drilling solution for Transocean. The two Transocean drill ships that contributed to a similar revenue for both years of about $160 million. Let's move on to the next slide. This is the last segment, a specialized shipbuilding segment, where we focus on green solutions, green vessels. A slight decline or a significant decline rather, in terms of revenue for the year as the project under execution reaches most of their final completion stages, whereby revenue recognition is reduced. The key projects under execution, firstly, the three units of fully battery-operated RoPax or roll on roll off passenger ferries, as well as a 12,000 m³ LNG bunker vessels. Zooming back up to the overall order book. The net order book ends the year at SGD 1.3 billion.
Within this, SGD 1.1 billion comprise of projects under execution and SGD 0.2 billion comprise of ongoing repairs and upgrades projects. As CEO has mentioned earlier, among the key projects secured this year include the Sofia high voltage direct current electrical system offshore substations, the P71 FPSO, as well as the Pluto train for LNG. Overall, we will guide that the orders visibility has continued to improve and we are focused on converting a few of our active pipeline development projects into contract awards in the course of this year. In terms of the project delivery for our 16 projects under execution, as you can see for 2022, we have a total of 12 projects to be delivered.
Just to mention that of these 12 projects, as of now in February, three have already been completed. The Formosa 2 project, the Tyra wellhead project, as well as the Johan Castberg project. These three have been completed. We work on the other nine in the course of this year. The remaining projects, two in 2023 and one each in 2024 and 2025. That is all we have for today's details on the financial performance. Thank you.
Thank you. Thank you, Mr. Wong. Thank you, William. We would now like to open the floor for question and answer. Before you address the meeting, could you please identify yourself and the organization that you represent? You may put through your questions on the webcast platform. All right, we have the first question coming in from Yeo Yong Siang. The question: Do you have any update on the arbitration issue with the vendor based on the news release on 24th December? If I may take this question. All right. The company has, in its 24th December announcement, maintained that the contract for the supply of equipment were validly suspended or terminated, and we shall provide update when there is material development. Thank you, Yeo Yong Siang, for your question. Good evening, Rahul from HSBC. Rahul has the following question for management. I have three questions.
One, could you share more details on the orders Sembcorp Marine is currently in negotiation in terms of order size and timeline that we can expect it to be signed? Two, could you share the impact of increased carbon cost that was stated in the recent Singapore budget? Approximately how much of this cost were in 2021 for the company, I beg your pardon. Third, can you please provide more color on sensitivity of possible impact of high interest environment on your financial expenses?
Let me take on these questions, and Mr. Wong, please chip in, especially on the second question. First, Rahul, thanks for your question. In terms of more details on the orders that we are currently in negotiations, I guess you appreciate that there are commercial sensitivities to what we can share on a specific basis, but we can guide that, in terms of the Brazilian Navy vessel, that one is in advanced stage of discussion and negotiation, so we are expecting that order to be by the middle of this year. Besides that, we do have other projects whereby we are in active negotiation at a contract level.
It is premature for us to be specific here, but we can guide, as I mentioned earlier, the orders visibility has improved for this year. We are hopeful of converting more orders this year compared to last year. In terms of the impact of increased carbon costs mentioned in Singapore Budget, presently the carbon tax is very much applied to certain key players like, for example, the power producers. For us, the impact is immaterial. Having said that, in terms of the significant increase in carbon cost mentioned in the budget, it will have an impact from multiple counts, especially on the cost side, and this is something that we have to bear in mind.
What it implies is that globally, as the global community embrace carbon costs, the cost of projects, whether it's on the oil and gas side or whether it's on renewable side, the impact will be felt. Obviously, for oil and gas, factoring the carbon cost will increase the overall cost of any project's evaluation. In that sense, the attractiveness of the project economics will have to bear in mind this increased carbon costs. The flip side of it would be that for renewable energies, for example, and other greener solutions, the carbon cost in terms of its relative economic attractiveness will improve.
In that sense, the very good trajectory that we experienced over the last couple of quarters in terms of potential for renewables and other clean and green solutions, we expect that such kind of legislation embraced by local community will make such projects more attractive going forward. We are well-positioned to take on such opportunities. In terms of providing more color and sensitivity of possible impact on the higher interest rate environment, this is something that we have expected, anticipated, for quite some time now. It's a matter of how fast and how steep the gradient is in terms of increase. From our standpoint, our gross and net debt is manageable. In our evaluation of the impact, we are factoring some increased interest costs.
More importantly for us is that as the interest rate yield curve was relatively flat, we have locked in a significant percentage of fixed rate interest rate swaps. These will actually cap and hedge our interest costs even in the increasing interest rate environment. I hope that helps. Thank you.
Thank you. Thank you, William. All right, we have a question coming in from Adrian Loh of UOB Kay Hian. He has this to share: Thank you very much for the presentation. It was pleasing to note Mr. Wong's comment that results will be better in 2022 than 2021. Could you please expand on that? For example, what are the projects you are looking at winning, the margins, supply chain or labor issues?
I think, thanks for the question, Adrian. As you know, we normally do not provide specifics in terms of margins or probability of winning. Again, on a general basis, as I said earlier, we can guide that we are working actively on several significant projects and some of these projects in terms of the contract value can be pretty significant. Certainly north of SGD 500,000 million or even bordering into the SGD 1 billion kind of numbers possibility. We presently will not guide our margins because that will depend on the final negotiations and should we reach the contract award stage, then we would have better clarity on such potential margins.
The one thing that we are very mindful of is that, our past experience in the last two years in terms of a supply chain impact as well as, labor issues, we are very mindful and therefore we are much better prepared in terms of evaluating, such kind of potential issues, vis-a-vis the kind of contracts in terms of the nature of the contract requirements for different kinds of, resources. What is important for us is to be able to manage our bottlenecks and, this is something which with past experience, we'll be much better able to manage that. Having said that, if there is, a most recent development that is going to impact the entire sector, and that is that the recent events in terms of the Ukraine, invasion by Russia, this would have some impact.
It's too early to determine. The experts are there to evaluate. Certainly this will impact in terms of possible supply chain, especially in terms of the equipment procured in Europe and also in terms of overall inflation. It is something that we have to be mindful of. As we work towards the finalizing of negotiation of our contracts with our customers, these factors were taken into consideration so that we will not be unnecessarily caught out in situation of significant increase in inflation. Thank you.
Thank you. Thank you, William. We have a question from Amanda of Upstream, and she asked, should the slide before have read SGD 1 billion instead of SGD 1 million? I'd like to address this, Amanda. Yes, it should be SGD 1 billion. It will be corrected in the slide. Thank you for bringing this up. Amanda has another question for management. You have said that no existing projects have been canceled, but are clients trying to change your work scope?
Thank you, Amanda. Throughout the pandemic situation, especially last year, we worked closely with the customer, coordinating with them closely about the overall requirement of the customers. For instance, some of the customer require the vessels to be delivered from the yard earlier due to the heavy transportation vessels constraint. We work all this closely with the customer. Also, in certain cases, it's also for doing something in extra, right? That enable the customer to continue with the work in a much better controlled manner. All of this is actually in discussion with a win-win situation and is not considered as a cancellation. It's considered as a modification to scope of work.
Thank you. Thank you, Mr. Wong. Next question from Philip Loh of GK Goh. Philip has this question for management. There are a few major deliveries like the Shell Vito, Johan Castberg and Tyra over the past month. Can I therefore assume that the cash balance of the group is now higher than the SGD 1.1 billion at 2021 year end? With the cash collection for these deliveries, will the cash improve?
Thank you for the question. It's certainly a good observation. Short answer is yes. As we complete and deliver these projects, we would be collecting the completion payments, and so therefore our cash balance as of now should be higher than the situation at end of 31st December. Having said that, we want to guide that, even as the project sail away, there'll always be the residual documentation process to take into account. Overall directionally it is an improvement. Thank you.
William? Next, we have question from Lim Siew Khee of CIMB. Two questions from her. One, what is the basis of your guidance of significantly better financial for full year 2022? Is it because you do not foresee provisions of additional cost? Question two, can we get a sense of gross level? Would it turn into gross profit?
Siew Khee, thanks for the two questions. I think I will respond to the second one, and that is that, where we are now in terms of guidance of whether it will be a positive or a breakeven or negative situation, it's a bit early for us to guide. As we have guided in our outlook, it will be a significant improvement compared to FY 2021. Your first question. In terms of why it is significantly improved, is it a case of the provisions for additional cost is no more required? The short answer is yes. I think, barring unforeseen circumstances, we typically cater conservatively for the cost to complete.
As we progress closer and closer to project completion, the variability and the certainty would therefore be improved. From where we stand, we believe that whatever provisions that we make will be sufficient. With the completion of more projects in the coming quarters, we do not foresee further provisions. If you exclude the provisions, it is not difficult as you see in the earlier presentation, that excluding the major provisions, the performance of the company at a core level would improve significantly. Thank you.
Thank you. We circle back to Amanda of Upstream. She has this question for management. If the oil price stays above $100 per barrel reached again yesterday, do you think that will make the outlook better, neutral, or worse for Sembcorp Marine in relation to the jobs you are currently bidding for?
Let me try to respond to that first. I think in terms of the oil prices, firstly, we all know that oil prices are driven by not just secular factors but also temporal factors. In this case here, geopolitical considerations. From our standpoint, as we understand increasingly our customers, the IOCs, the NOCs, our understanding from them is that as they look at sanctioning of projects, they look at it on a much longer-term basis. In terms of their evaluation of the project sanction, the FID decision, especially for offshore projects, typically, their oil price range is a lot lower than the current oil price level.
We've guided in the past that following the downturn since 2015 in terms of the optimization of development for this large offshore oil fields, the oil majors typically are looking at a range of $40-$55 oil as a basis of evaluating whether or not to proceed. Naturally, with the current oil price, it's a lot more constructive, so it won't be difficult for them to make the decisions. Having said that, again, these are long-term investments and so therefore, the oil majors, as they evaluate their investment decisions, it wouldn't be just the temporal fluctuations in oil prices, but overall, with higher oil prices, it is constructive. Our view is that temporary factors will not be able to underpin elevated oil prices.
The view here is that it will settle to a more sustainable levels. More important for us is that our end customers, the oil majors, as they look at offshore, which is our main focus segment, traditionally, most of their projects are in the $40-$60 range, some even lower than $40. I hope that helps.
Thank you, William. We have a follow-up question from Philip Loh of GK Goh on manpower. How is the manpower situation for Sembcorp Marine now? Has the skilled labor shortage situation we encountered in 2021 improved somewhat, and by how much?
Thank you, Philip. The manpower situation for Sembcorp Marine has improved tremendously compared to October, September last year. Currently with the easing of the workers returning to Singapore, I think this will further strengthen the rebuilding of the core workforce for Sembcorp Marine. At the moment, we do not foresee any manpower shortages at all for us to complete the work. Thank you.
Okay. Thank you, Mr. Wong. Adrian Loh of UOB Kay Hian is back with some question. Could you please give us some colors on the labor situation? Similar question. While it has improved, would it be fair to say that it is still tough to get workers to come to Singapore? Are you still sourcing from your usual markets? And if it is new markets, is there more training needed? And does timeliness to delivery need to be extended?
Thank you, Adrian. The current manning level for Sembcorp Marine is sufficient for us to complete all the remaining projects until completion. However, what we are looking now is to replenish the temporary workers that we employ last year, especially to rebuild the vacuum caused by the workers returning to their home countries and could not return among our subcontractor workforce. In short, currently we will not have any shortages to complete our work. We will continue with our mid-term planning to have these skilled workers to return back to the Sembcorp Marine Group, including our subcontractor workforce and progressively so that when we have a new orders secure, we will not have issue again with the skilled workforce. Thank you.
Thank you. Thank you, Mr. Wong, for addressing the labor issue. Next, we have three questions from Joseph. One, on the Transocean rigs, why was the delivery delayed as I believe it was guided for Q4 2021? Two, given the shift of FPSO's construction methodology towards one where the hull is manufactured in low-cost countries and topsides integrated in Singapore, how is SCM able to compete given the increasingly higher cost for your foreign workforce? Third question, on the deferred payment for Borr, can management share the interest to be received and if there are any accelerated payment clause in the contract?
Okay. Joseph, allow me to take the first two question first. On the Transocean rigs, as we have explained before that a lot of our projects been delayed and especially caused by the disruption of our workforce and also caused by the COVID-19. Secondly, right, on the shift of the construction methodology, I explained before what we will do to capture the competitive edge is to work with our partners in the different countries to do some of the fabrication blocks or parts of the components so that for Sembcorp Marine, we're able to reach out to different locations for post-completion for fabrication and returning them back to Singapore as an integration yard as well.
That is why we have constructed the 30,000 ton Goliath crane lifting capacity, right, for us to able to integrate each of the components seamlessly and effectively. Yes, there are certain part of the work we can outsource, especially it's only the steel portion. It's more efficient and where we can perform the work in parallel. Whereas for those with a lot of equipments, a lot of project management, and as well as the procurement coordination, we will prefer to be done in our shipyard using the partial and fully automated structure fabrication process plan. William, for the third question, please.
Sure. In terms of the deferred payment for Borr, just to say that firstly, these are commercial terms which we could not guide specifically given the confidentiality. Secondly, also to have a brief update to say that the final documentation stage is still in progress. In terms of the interest to be received, yes, as we defer the principal payment, there is actually the accelerated payment of the interest between now and the maturity date of the principal. There will also be the usual clauses of full acceleration under certain events. Yeah, I hope that helps.
All right. Adding to what William has just shared, if you refer to our announcement on 28th December 2021, we have guided that Borr Drilling would pay interest at market rates for those periods. All right. I'm circling back to Philip Loh of GK Goh. He is asking more question on manpower situation. He mentioned, "Since the manpower situation has improved, can we assume there is at least a possibility that some of the provisions made, which are manpower-related, can be written back this year?
Okay. Thank you, Philip. When we plan our temporary increase or ramping up of the manpower, we have made some forecasts on what will be the impact deriving from the COVID-19 situation. The management has decided in order to partly solve the problem. We have decided to plan according to the completion of each of the projects. Hence, we developed the manpower planning. I would say that there will not be extraordinary type of surpluses and so on. All the manpower being planned recruited are all under the management and deployment of the shipyard, direct engineers and management. With this, we do not foresee any manpower that we will able to have extras without any work.
Maybe William can supplement with more on the right bang on.
You are absolutely right. As we evaluate the provisions required to complete the projects, it is always relatively optimized, although there will always be some contingency. I think what is important is that as we complete more projects, there is more flexibility in terms of mobilizing the manpower resources. This will actually provide the kind of redundancy to cater for any unexpected situation. We will be more resilient, and are more able to ensure that we have smoother completion of these projects. Thank you.
Thank you, William. It looks like no more questions are coming in. Shall we just wait a second to see if there are more submissions? All right. Next set of questions comes from Ho Pei Hwa of DBS Bank. Good evening. Thank you, management, for the presentation. What is the yard's current workforce? Recall it was slightly under 15,000 in the first half of 2021. Assuming more orders coming through in the first half, are we able to ramp up fast to meet the requirement?
Thank you, Pei Hwa. The current work manning, we also consider that the building of the order book will require a lead time for engineering as well as for procurement. With this in mind, the overall manpower planning we've done last year, right, has also catered for such development in order book. With this scenario, management consider that if with the order book continue to build up, we can also incrementally rebuild the manpower manning graph, and we have time to scale up the manning from time to time to cater for the new requirement.
Thank you, Mr. Wong. All right, we have a question from Rahul again, from HSBC. Will there be any more yard reinstatement costs in the future?
Thanks, Rahul, for the question. The short answer that we hope not, because as we look at our reinstatement costs, based on the reinstatement concept, we cater for the cost accordingly. The small additional provision that you see in the second half, slightly increased, among other things, is also to cater for the elevated inflation that we are observing in terms of the economic environment. Just to be prudent, we cater the extra bit for this second half of the year. Otherwise, we do not foresee further yard reinstatement cost needs going forward. Thank you.
All right. We come back to Siew Khee with one question. On order win, do you expect to hear of some, I suspect it's some more, in first half?
We hope so. I think we are optimistic that, during the first half, we hope to be able to have some announcement in terms of orders. Again, until we make the announcements, things certainly is not definite. Thank you.
All right. We have one question from Raphael Lim of SPH. He asked, "For the JC FPSO vessel, were there other parts of the project originally planned that were not completed here due to manpower shortage and transferred to the Norwegian Yard as per previous reports? The previous clarification doesn't make it clear whether the full scope of work originally planned by Sembcorp Marine has been carried out or if there were significant variations being made that may result in lower revenue.
Thank you, Raphael. First of all, I would like to clarify that Johan Castberg FPSO, as a FPSO, it has both the hull, which is holding the oil and the liquid, the living quarters which also house the control room, and then the third part is the topside where all the production facilities are situated. For our scope of work is on the hull as well as the living quarters. The last piece is the mooring system. The mooring system for the FPSO Johan Castberg, the construction of the mooring system is not our scope of work. It is free issue to the shipyard for the part installation on the vessel before the full integration with the entire hull and the topside in Europe.
I hope this can clarify the scope of the original contract for Johan Castberg. When we discussed with the customer to have a better solution on the timing of sending the hull back to Europe due to the constraint of the transportation vessel. We have come to a plan on what are the works need to be done in addition to the original contract for Sembcorp Marine, as well as what are the possible scope that we can reduce to accommodate the shorter time to the final stage of delivery as planned. As there is some plus and there are some reduction, right? I think there is no significant variation in terms of resulting in lower revenue.
Thank you. Thank you, Mr. Wong, for that clarification. We are not getting any further questions. We would like to thank everyone for your participation. Thank you for joining us this Friday evening. On behalf of management, I'd just like to say have a good weekend. Thank you.
Thank you.
Thank you.