Singapore Markets closed

Electricity price jolt could increase Sembcorp Industries' profit

Electricity price jolt could increase Sembcorp Industries’ profit

Electricity prices in India bolted to a record high of 10.6 cents/kWh (INR5.1/kWh) in Q3.

A jolt in Indian spot electricity prices could save Sembcorp Industries' Indian business from further losses, UOB Kay Hian said.

The firm said spot electricity prices in India bolted to a record high of 10.6 cents/kWh (INR5.1/kWh) in Q3 and even hit a 15-minute peak of 20.7 cents/kWh (9.9/kWh). The spike was due to a power supply crunch on higher electricity demand from power distribution companies.

As an effect, Sembcorp Industries' Sembcorp Gayatri Power Limited's (SGPL) losses of $26m in Q1 and $29m in Q2 could narrow down by as much as 30-40%.

On a net basis, SGPL will recognise a significantly higher electricity tariff in 3Q17. By tactically shutting down its Unit #3 for maintenance, Unit #4 effectively had its generation contracted out at the higher short-term PPA tariff of around 7.3 cents/kWh (Rs3.5/kWh).

SGPL also capitalised on the price spike in 3Q17 as it ramped up its plant load factor (PLF) to more than 90%.

“On the back of this, coupled with the effects of reduced finance costs, we expect SGPL’s 3Q17 quarterly core loss to shrink by 30-40% from previous quarters,” UOB Kay Hian said.

Whilst electricity prices have corrected to 7.1 cents/kWh (INR3.4/kWh), the firm said it could still remain elevated on structural factors.

Sembcorp Industries' India operations brought in a robust performance for Q3. PLF for Thermal Powertech Corporation India Limited (TPCIL) hit 91%, whilst it reached 73% for SGPL.



More From Singapore Business Review

  • Finance
    Associated Press

    AP Top Extended Financial Headlines at 4:36 a.m. EDT

    Government proposes tax break rules to lure 'opportunity zone' investors

  • Italy brushes off downgrade as it plans EU budget response
    Finance
    Associated Press

    Italy brushes off downgrade as it plans EU budget response

    Italy's deputy premier on Saturday brushed off a ratings downgrade and vowed to forge ahead with the government's rule-busting budget as Italy prepared to respond to European Union concerns about its high deficit targets. International credit rating agency Moody's late Friday downgraded

  • A shadowy group spent £257,000 on Facebook ads asking people to drive a knife into Theresa May's Brexit plan
    Finance
    Business Insider

    A shadowy group spent £257,000 on Facebook ads asking people to drive a knife into Theresa May's Brexit plan

    Politicians have uncovered evidence of a dark advertising campaign on Facebook, in which Brits were encouraged to lobby against Prime Minister Theresa May's Brexit plan. The Digital, Culture, Media, and Sport Committee said £257,000 was spent on the adverts by an anonymous group called the Mainstream

  • News
    Reuters

    African billionaire abducted in Tanzania returns home safely

    DAR ES SALAAM/NAIROBI (Reuters) - Africa's youngest billionaire, snatched a week ago off the street outside a luxury hotel in Tanzania, has returned back home safely, police said on Saturday. Mohammed Dewji, 43-year-old CEO of the METL Group family conglomerate, was seized as he arrived for a morning

  • BOJ deputy governor doubts digital currency will enhance monetary policy
    Finance
    Reuters

    BOJ deputy governor doubts digital currency will enhance monetary policy

    Bank of Japan Deputy Governor Masayoshi Amamiya said on Saturday it was doubtful whether central banks could enhance the effectiveness of their monetary policies by issuing digital currencies. Some academics have said central banks could overcome the "zero lower bound" - a situation in which

  • Posthumous Hallyday album sells 300,000 on first day
    Style
    AFP Relax

    Posthumous Hallyday album sells 300,000 on first day

    French rocker Johnny Hallyday's posthumous album sold 300,000 copies on Friday after going on sale at midnight, the late star's record company Warner Music France told AFP. Fans of the singer, whose death last year sparked a nationwide outpouring of emotion, queued outside record stores on Thursday

  • In Reno, a boomtown resurgence leads to a housing crisis
    Finance
    Associated Press

    In Reno, a boomtown resurgence leads to a housing crisis

    They were the toast of Reno in the 1950s, when the growing casino industry sparked a boom that for a time turned northern Nevada into the West's top gambling destination. Dozens of downtown motor lodges provided spare but comfortable retreats for motorists who took to the nation's new highways

  • California's growing shadow looms over Nevada's midterms
    Finance
    Associated Press

    California's growing shadow looms over Nevada's midterms

    The Republicans running in Nevada's hotly contested races for governor and U.S. Senate are taking aim at a common target as they try to maintain GOP control of the seats: California. As more Californians have poured across the state line over the past few years, many of them escaping sky-high housing

  • Should You Average Up Or Down On An Investment Position?
    Finance
    Motley Fool

    Should You Average Up Or Down On An Investment Position?

    Is it wise to either average up or average down on your current investments? And what are the risks involved?

  • News
    Reuters

    Alaska's independent governor ends re-election bid, endorses Democrat

    With just 18 days left before the Nov. 6 election, Walker said he concluded that he could not win a second term in a race against both former U.S. Senator Mark Begich, a Democrat, and former state Senator Mike Dunleavy, a Republican. Walker, 67, said his decision to bow out was based entirely on what

  • How do Deliveroo and Uber workers cope with precarious pay?
    Finance
    The Guardian

    How do Deliveroo and Uber workers cope with precarious pay?

    Deliveroo riders’ daily pay can vary wildly depending on demand. Photograph: Dan Kitwood/Getty Images

  • 'Repeated requests but TalkTalk still won’t change my bills'
    Finance
    The Telegraph

    'Repeated requests but TalkTalk still won’t change my bills'

    Please see a letter I have had from TalkTalk offering me a new contract at £25.75 per month following the expiration of my earlier one. I enclose my letter accepting that offer a week later and asking it to be effective immediately.

  • Finance
    Reuters

    UBS warns staff over China travel after banker held in Beijing - source

    The banker, who is based in Singapore and works in the relationship management team in UBS's wealth management unit, still has her passport, but was asked to remain in China and meet with local authority officials next week, the person said. The identity and position of the banker were not known

  • 'Why didn't Sainsbury's honour its £20-off voucher?'
    Finance
    The Telegraph

    'Why didn't Sainsbury's honour its £20-off voucher?'

    We received a voucher from Sainsbury’s saying: “We’ve missed you. Save up to £30 off your next two online grocery shops”.

  • China's September new home price gains led by smaller cities
    Finance
    Reuters

    China's September new home price gains led by smaller cities

    China's new home prices increased at a firm pace in September, supported by gains in smaller cities and showing the market remained resilient despite pressures from softer investment, a slowing economy and government curbs on the sector. Average new home prices in China's 70 major cities rose

  • Stocks Mostly Mixed, but Dow Finishes Week Higher
    Finance
    FX Empire

    Stocks Mostly Mixed, but Dow Finishes Week Higher

    Proctor & Gamble surged after reporting better-than-expected earnings. The company said it got a boost from strong beauty-product sales. A report from the National Association of Realtors showed on Friday that U.S. home sales fell in September by the most in over two years as the housing market continued

  • S&P 500 Weekly Price Forecast – stock markets stabilize
    Finance
    FX Empire

    S&P 500 Weekly Price Forecast – stock markets stabilize

    The stock markets overall stabilized in America during the week after the brutal selloff that we have seen. While we have not shown a lot of bullish pressure, we haven’t fallen any further either, which of course is crucial.

  • Silver Weekly Price Forecast – Silver holds steady for the week
    Finance
    FX Empire

    Silver Weekly Price Forecast – Silver holds steady for the week

    Silver markets went back and forth during the week, forming a bit of a neutral candle. This is a good sign though, because we are trying to form a bit of a base in the silver market. Ultimately, I believe that we will break out, but it’s going to take a bit of grinding sideways before doing so.

  • Crude Oil Weekly Price Forecast – Crude oil markets have another rough week
    Finance
    FX Empire

    Crude Oil Weekly Price Forecast – Crude oil markets have another rough week

    Crude oil markets fell again during the week, breaking through some technical barriers but we also have support just below. I think the next weekly candle is going to be crucial for the market, so therefore it’s likely to be an interesting few days ahead of us.

  • Finance
    Reuters

    China's Sept new home price gains led by smaller cities

    China's new home prices increased at a firm pace in September, supported by gains in smaller cities and showing the market remained resilient despite pressures from softer investment, a slowing economy and government curbs on the sector. Average new home prices in China's 70 major cities rose

  • Natural Gas Weekly Price Forecast – natural gas ends the week somewhat flat
    Finance
    FX Empire

    Natural Gas Weekly Price Forecast – natural gas ends the week somewhat flat

    The natural gas markets have gone back and forth in while trading during the week, as we are essentially neutral at this point. At this juncture, it looks as if we are getting a bit ahead of ourselves, and the previous shooting star of course has me looking at a potential pullback.

  • Gold Weekly Price Forecast – Gold markets rally for the week
    Finance
    FX Empire

    Gold Weekly Price Forecast – Gold markets rally for the week

    Gold markets rallied a bit for the week, as we have cleared the recent consolidation and it now looks like the rally is going to continue. The $1250 level above looks to be rather resistive and perhaps a nice target for the time being.

  • USD/JPY Weekly Price Forecast – US dollar finding support
    Finance
    FX Empire

    USD/JPY Weekly Price Forecast – US dollar finding support

    The US dollar has found significant support at the 61.8% Fibonacci retracement level, near the ¥111.50 level. This is a market that has been in a strong uptrend for some time, and it now looks as if that is trying to continue.

  • GBP/USD Weekly Price Forecast – British pound continues to be very messy
    Finance
    FX Empire

    GBP/USD Weekly Price Forecast – British pound continues to be very messy

    The British pound continues to be very messy overall, forming a bit of a shooting star during the week, but quite frankly we are just simply bouncing around between the 1.30 level and the bottom, and the 1.3250 level in the top. This makes perfect sense considering everything that’s going on though.

  • GBP/JPY Weekly Price Forecast – British pound neutral against yen
    Finance
    FX Empire

    GBP/JPY Weekly Price Forecast – British pound neutral against yen

    It’s been a wild week, but it looks like we are going to close the GBP/JPY pair relatively flat which of course is a victory after the massive selloff last week.