Sembcorp sees 21% higher 1Q earnings of $77 mil on improved energy business

SINGAPORE (May 15): Sembcorp Industries posted 1Q19 earnings of $93 million, 21% higher than the earnings of $$77 million in 1Q18, on improved performance from the energy business.

Correspondingly, basic earnings per share rose to 4.68 cents per share from 3.64 cents per share.

Turnover was 10% lower at $2.5 billion compared to $2.8 billion in 1Q18.

Net profit for the energy business increased 21% to $85 million in 1Q19 compared to $70 million in 1Q18, mainly driven by improved performance from India and recognition of peak winter availability payments for UK Power Reserve.

Xinmin municipal water asset in China was divested for a total consideration of RMB99 million ($20 million), bringing total group divestment proceeds to $220 million since the beginning of 2018.

The Urban business posted a net profit of $7 million, down 30% from a year ago with stable contribution from Vietnam but lower contribution from China.

Marine business saw net profit fall to less than a million from $2 million a year ago due to continued lower overall business volume which impacted the absorption of overhead costs, offset by margin recognition from newly secured production floater projects and the delivery of a rig.

Group NAV stood at $3.87 as at end March compared to $3.80 as at end Dec.

In its outlook statement, Sembcorp says its Energy and Urban businesses continue to underpin the group’s performance. However, the market environment continues to be challenging in 2019, especially for the offshore and marine sector.

Global economic growth is projected to ease as markets face escalating risks including rising trade tensions and tightening financial conditions.

The group says it remains focused on executing strategy, improving performance as well as strengthening its balance sheet, and is on track to deliver on its divestment programme.

Shares in Sembcorp closed 1 cent higher at $2.53 on Tuesday.