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Sembcorp Industries' full-year net profit down 28% to $394.9m
Overall net profit for the year, however, is down 28%
Global energy, water, and marine group Sembcorp Industries Ltd. increased its Q4 earnings 143% to $147.5m compared to just $60.8m from the same period last year. The company also posted a net profit of $394.9m and a turnover of $7.9b for the full year 2016, lower than $548.9m and S$9.5b recorded in the previous year.
The biggest contributor to the Group’s earnings is the Utilities business, whose profit, excluding exceptional items, grew 4% from FY2015 to $348m driven by strong growth in its China operations. In 2015, the business also divested an Australian waste management joint venture and municipal water operations in the UK and Zhumaidan, China, and recorded exceptional items totalling $369.9m.
The Urban Development business recorded a net profit of $33.3m, against $33.5m in 2015, while the Marine business posted a net profit of $48.3m, a recovery from a net loss of $176.4m in the past year.
“Operations outside Singapore contributed over 60% of the business’ net profit, demonstrating the success of our overseas strategy,” said Tang Kin Fei, group president and chief executive officer. Tang further sees the market environment to remain challenging in 2017, but he is optimistic about the company’s resilience.
Several developments can weigh on Sembcorp’s performance for 2017. In China, the Yangcheng cooperative joint venture agreement has expired, while in India, its second thermal power plant has yet to secure long-term power purchase agreements. To sustain growth for its Utilities business, the company aims to focus on operational excellence and on executing long-term projects.
For its Marine business, Sembcorp sees opportunity in rising global demand for gas, which can benefit its broad-based LNG solutions and capabilities. For Urban Development, the company is banking on land sales in its urban developments in Vietnam, China, and Indonesia.
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