SINGAPORE (May 3): Sembcorp Industries saw earnings grow 11.3% to $119.1 for the 1Q ended March, from $107.0 million a year ago.
This was mainly due to Sembcorp’s urban development business, which posted a net profit of $37.2 million in 1Q17, compared to $1.2 million a year ago. This was largely attributed to higher land sales by its China associate.
The group’s utilities business contributed $55.3 million in net profit to the group, some 27% lower than net profit of $75.2 million a year ago.
This was due to its second thermal power plant in India, SGPL, being adversely affected by weak spot and short-term power tariffs due to a lack of long-term power purchase agreements being available in the market.
Net profit contributed by Sembcorp’s marine business fell 28% to $24.1 million in 1Q17, mainly due to lower contribution from rig building projects.
Revenue grew 12.9% to $2.14 billion in 1Q17, from $1.90 billion a year ago.
Cash and cash equivalents stood at $1.77 billion as at March 31, 2017.
“Sembcorp delivered a reasonable set of first quarter results, underpinned by a good performance from our urban development business. This underscores how our diversified portfolio of businesses gives us some strength and resilience as a group,” says Group President and CEO Neil McGregor.
McGregor announced that Sembcorp will be undertaking a “complete review” of its businesses and strategic direction over the next few months.
“We face a challenging macro environment with rapidly changing market dynamics,” he says. “As we reshape Sembcorp, we will continue to build businesses that are durable and sustainable.”
Shares of Sembcorp Industries closed 1 cent lower at $3.00 on Wednesday.
