Sembcorp Industries reports 2HFY2022 earnings of $358 mil, 54% higher y-o-y

A final dividend of 4.0 cents and a special dividend of 4.0 cents per ordinary share has been declared for the period.

Sembcorp Industries U96 has reported earnings of $358 million for the 2HFY2022 ended Dec 31, 2022, 54% higher than the $233 million in the 2HFY2021.

This brings the group’s earnings to $848 million for the FY2022, up 204% y-o-y.

In the 2HFY2022, turnover on continuing operations increased by 3% y-o-y to $3.92 billion mainly from the renewables segment and higher progressive revenue recognition from the specialised construction business. The increase was offset by the lower turnover from the waste management business.

Including discontinued operations, turnover for the 2HFY2022 increased by 3% y-o-y to $4.64 billion.

Group net profit before exceptional items for the 2HFY2022 stood 79% higher y-o-y at $393 million due to the higher net profit before exceptional items across all segments except the integrated urban solutions and corporate segments.

Sembcorp’s renewables and conventional energy segments led the y-o-y growth. The renewables segment saw net profit surge 100% y-o-y to $64 million while conventional energy surged by 96% y-o-y to $369 million.

However, the higher group net profit before exceptional items was offset by exceptional items of negative $35 million. The amount comprises a $19 million impairment in the conventional energy segment mainly for a woodchip boiler and other facilities in Singapore as well as an $8 million write-off in the renewables segment of an investment in Vietnam for project expenses. The amount also includes impairments totalling $8 million in the integrated urban solutions segment for a water asset in China following changes in water tariffs, an investment in the UK for project expenses incurred by the company, and urban’s share of lower market valuations of underlying property assets in China.

2HFY2022 gross profit increased by 61% y-o-y to $740 million.

2HFY2022 profit before tax increased by 52% y-o-y to $400 million.

Turnover on continuing operations for the FY2022 increased by 22% y-o-y to $7.83 billion mainly from the renewables and conventional energy segments.

Including discontinued operations, turnover for the FY2022 increased by 21% y-o-y to $9.40 billion.

Group net profit before exceptional items grew by 87% y-o-y to due to higher contributions from the conventional energy and renewables segments.

Net profit before exceptional items for the renewables segment surged by 150% y-o-y to $140 million propelled by the contributions from Shenzhen Huiyang New Energy (HYNE) and 35%-owned SDIC New Energy, as well as higher power prices for the solar assets in Singapore.

The group secured 3.6GW of renewables capacity during the FY2022, bringing its total renewables capacity to 9.8GW as at end-December.

The conventional energy segment saw net profit before exceptional items grow by 105% y-o-y to $766 million due to better performances in Singapore and the UK on higher energy demand and margins.

Net profit before exceptional items for sustainable solutions increased by 36% y-o-y to $288 million.

Integrated urban solutions fell by 5% y-o-y to $148 million due to lower land and property sales on the back of a slowdown in the China market. This was mitigated by higher contributions from the waste-to-resource operations in the UK on higher power prices.

Other businesses fell by 8% y-o-y to $23 million.

Corporate plunged by 42% y-o-y to $194 million.

Exceptional items improved by 82% y-o-y as the group only noted exceptional items of negative $35 million compared to the negative $193 million in the FY2021.

Earnings per share (EPS) for the 2HFY2022 and FY2022 stood at 19.66 cents and 46.57 cents respectively

Cash and cash equivalents as at Dec 31, 2022, stood at $1.25 billion.

“Our strong FY2022 results were underpinned by better performance in the conventional energy and renewables segments, supported by stable contribution from the integrated urban solutions segment,” says Wong Kim Yin, group president and CEO of Sembcorp.

“Our gross renewables portfolio has grown to 9.8GW, almost at our target of 10GW of gross installed renewables capacity by 2025. We remain focused on our transition towards a greener portfolio to create long-term value and growth for our stakeholders,” he adds.

A final dividend of 4.0 cents and a special dividend of 4.0 cents per ordinary share has been declared for the period. Together with the interim dividend of 4.0 cents, this brings Sembcorp’s total dividend for the FY2022 to 12.0 cents per share, up from the total of 5.0 cent per share dividend in the FY2021.

Shares in Sembcorp closed 1 cent lower or 0.27% down at $3.74 on Feb 20.

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