Backed by Strong Utilities Performance, Sembcorp Delivers Healthy Profit Growth in 9M2013

- Group net profit up 9% to S$596.7 million

Sembcorp Industries (Sembcorp) delivered healthy profit growth in the first nine months of 2013 (9M2013). Net profit grew 9% to S$596.7 million from S$548.6 million in 9M2012 while turnover increased 6% to S$7.8 billion from S$7.4 billion. Sembcorp’s main profit contributors continued to be its Utilities and Marine businesses, which contributed 59% and 35% of Group net profit respectively.

The Utilities business achieved 27% growth in net profit in 9M2013 with net profit growing to S$373.7 million from S$293.5 million in 9M2012 mainly due to gains from the initial public offering (IPO) of Sembcorp Salalah Power and Water Company, which were offset by an impairment made for its operations on Teesside in the UK. Excluding these exceptional items, the business achieved a 4% growth in net profit. The Marine business reported a net profit of S$226.3 million in 9M2013 compared to S$225.4 million in 9M2012. Meanwhile, the Urban Development business recorded a net profit of S$12.6 million compared to S$19.3 million in 9M2012.

For 9M2013, return on equity (annualised) for the Group was 16.6% and earnings per share amounted to 33.3 cents. Economic value added was a positive S$383.9 million while cash and cash equivalents stood at S$2.3 billion.

In 3Q2013, Group net profit grew 40% to S$254.4 million from S$181.2 million in 3Q2012, while turnover increased 31% to S$3.0 billion compared to S$2.3 billion. The Utilities business achieved a net profit of S$172.4 million, increasing 73% from S$99.8 million in 3Q2012, while the Marine and Urban Development businesses posted net profit of S$78.6 million and S$2.3 million respectively.

Tang Kin Fei, Group President & CEO of Sembcorp Industries, said, “Sembcorp delivered healthy profit growth in the first nine months of the year.

“We created value for shareholders by successfully developing the Salalah Independent Water and Power Plant in Oman, and selling down our stake in the company through an IPO. This generated a total gain of S$117 million for the Group. Our Marine business also achieved a significant milestone with its new integrated yard at Tuas commencing operations in August. With our strategic presence in key emerging markets, strong pipeline of projects and a robust Marine orderbook of S$13.5 billion, Sembcorp is well-positioned to deliver sustainable long-term growth.”

FY2013 Outlook

Utilities

The Utilities business is expected to deliver a better performance in 2013 compared to 2012 despite the impact of intensified competition in the Singapore gas and power market. Strategically positioned in emerging growth markets, the business continues to focus on its future growth with a strong pipeline of energy and water projects.

Marine

The Marine business has a net orderbook of S$13.5 billion, with completions and deliveries extending till 2019. The long-term industry fundamentals for the offshore and marine sector remain sound, and the business with its track record and proven capabilities is well-positioned to benefit from the opportunities in this sector. The new yard at Tuas commenced operations in August 2013.

Urban Development

The Urban Development business is expected to deliver a steady operating performance in 2013.

Group

The Group, underpinned by sound business fundamentals and a healthy pipeline of projects and orderbook, continues to be well-positioned to deliver sustainable long-term growth.

Highlights from Sembcorp’s 9M2013 Financial Results

•Turnover at S$7.8 billion, up 6%
•Profit from Operations at S$993.6 million, up 7%
•Net Profit at S$596.7 million, up 9%
•EPS at 33.3 cents
•ROE (annualised) at 16.6%
•Utilities achieves a 27% growth in net profit

*Profit from Operations = Earnings before Interest and Tax + Share of Associates and JVs’ results (net of tax).

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