Sembcorp Industries has reported earnings of $46 million for the 1HFY2021 ended June, reversing into the black from losses of $42 million in the corresponding period the year before.
This includes exceptional items of a negative $206 million, which includes an impairment of $212 million made for the 49%-owned Chongqing Songzao coal-fired power plant in China.
Earnings per share (EPS) for the 1HFY2021 stood at 2.55 cents on a fully diluted basis, from loss per share of 8.29 cents in the 1HFY2020.
Revenue for the half-year period increased by 26% y-o-y to $3.3 billion, due to broad-based growth in the group’s businesses.
Turnover for Renewables stood $9 million higher at $146 million due to higher contribution from the solar and energy storage businesses, while turnover for Integrated Urban Solutions stood $21 million higher at $218 million mainly contributed by the solid waste management business and offset by the absence of turnover from the water businesses divested in FY2020.
Conventional Energy’s turnover stood $543 million higher at $2.76 billion from the 1HFY2020 mainly due to the gas and related businesses.
Other Businesses and Corporate saw $100 million higher y-o-y. The lower turnover was mainly due to the dormitory lockdowns due to the Covid-19 pandemic in the 1HFY2020.
As such, group net profit before exceptional items grew 69% y-o-y to $252 million, mainly due to higher contribution from the Conventional Energy segment.
Net profit for the Conventional Energy segment improved by 45.7% y-o-y to $185 million before exceptional items compared to the $127 million posted in the 1HFY2020. The higher net profit was attributable to better performance in Singapore and India driven by higher energy demand and margins compared to the 1HFY2020.
The Renewables segment saw 27.3% y-o-y lower net profit of $24 million in the 1HFY2021 due to lower wind resource from its wind energy assets.
Net profit before exceptional items from the Integrated Urban Solutions segment dipped slightly to $63 million in the 1HFY2021 from $64 million in the 1HFY2020.
On this, the group has proposed an interim dividend of 2.0 cents per share, which will be paid on Aug 24. There was no interim dividend declared for the 1HFY2020.
As at June 30, cash and cash equivalents stood at $1.14 billion.
Looking forward, the group says its underlying performance will be negatively impacted by changes in its customer profile in the UK and Singapore. The loss of income from divested assets in Panama and Chile will also affect its figures negatively.
In addition, there are potential downside risks in the Conventional Energy segment across markets due to higher market volatility.
There will also be planned maintenance shutdowns in Singapore, Myanmar and India in the 2HFY2021.
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Furthermore, the group will be focusing on more sustainable solutions. To be sure, 78MW of renewable energy capacity was installed in the 1HFY2021. Another 87MW of renewable energy capacity is expected to come onstream by the end of the FY2021.
“While we delivered a resilient underlying performance in the first half of 2021, significant uncertainties remain across markets with the Covid-19 pandemic,” says Wong Kim Yin, group president & CEO of Sembcorp.
“Despite the challenges ahead, we will press on with the strategic transformation of our portfolio from brown to green and deliver long-term value and growth for our stakeholders. For the year to date, we completed the 60MWp Sembcorp Tengeh Floating Solar Farm in Singapore, one of the largest inland floating solar farms in the world, and also secured an additional 105MW of renewables project pipeline,” he adds.
Shares in Sembcorp closed 3 cents lower or 1.5% down at $2.03 on Aug 5.
Photo: Sembcorp
