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Sembcorp Delivers Healthy 9M2011 Performance

Friday, 24 February 2012 | 11:00
Sembcorp Industries (Sembcorp) achieved a healthy 5% increase in net profit (Net Profit) attributable to shareholders of the Company before exceptional items for the first nine months of 2011 (9M2011). Group Net Profit increased to S$557.4 million from 9M2010’s S$532.1 million. This excludes the Group’s share of Marine’s exceptional item of S$32.1 million in 9M2010. The Utilities business sustained its strong performance into 9M2011. Net Profit grew 22% and contribution to the Group’s Net Profit increased to 38% compared to 31% last year. The Marine business achieved a Net Profit of S$317.9 million compared to S$347.0 million in 9M2010.
Return on equity (annualised) for the Group was a healthy 18.1% and earnings per share amounted to 31.2 cents for the period. Economic value added was a positive S$456.6 million while cash and cash equivalents stood at S$2.7 billion.
In 3Q2011, Group Net Profit increased 5% to S$222.4 million. Utilities delivered a strong 33% increase in Net Profit to S$78.8 million, growing its contribution to the Group’s Net Profit to 35% from 27% in 3Q2010. Marine’s 3Q2011 Net Profit was S$135.2 million compared to S$148.4 million last year.
Mr Tang Kin Fei, Group President & CEO of Sembcorp Industries, said: “Over the years, the Utilities business has grown and increased its contribution to the Group’s Net Profit from less than S$50 million ten years ago to over S$200 million today. We intend to further grow and expand our Utilities business through the implementation and completion of projects under construction and securing new growth opportunities. Together, the Utilities and Marine businesses will form a strong solid base to deliver sustainable earnings to our shareholders.”
FY2011 Outlook
The Utilities business is expected to deliver a better performance compared to last year and the Singapore operations will continue to be the main driver. Operations in all regions are also generally expected to perform better except the UK largely due to low power spreads. We are committed to deliver long term growth through focused execution in existing businesses, completion of committed projects within schedule and cost, as well as the active pursuit of new growth opportunities.
Our Marine business has a current net orderbook of S$5.2 billion with completion and deliveries till 2014, including S$3.2 billion worth of new contracts secured year-to-date. The medium to long-term fundamentals for the offshore oil and gas industry remain intact with exploration and production (E&P) expenditure by oil majors and national oil companies expected to increase further into 2013, especially for the deep and ultra-deepwater segments. Outlook for the fixed and floating production market remains positive. For ship repair, Marine has secured several long-term contracts from its customers which will continue to provide a stable base-load for the business.
Overall, enquiries remain healthy but competition is keen.
Construction of the Phase I Integrated New Yard facility in Tuas View Extension is progressing on schedule with two VLCC drydocks due for operations by end of 2012. The Group’s ship repair and ship conversion/offshore capacity will increase substantially when the remaining two VLCC drydocks and ancillary facilities are completed and operational by the second half of 2013.
Industrial Parks
Industrial land sales continue to be strong in Vietnam but sales of commercial and residential land have slowed down. In China, land preparation works for the Sino-Singapore Nanjing Eco Hi-tech Island project have progressed and land sales are expected to commence in 2012.
Despite an increasingly uncertain global economic outlook, the Group expects to achieve satisfactory results in FY2011.
Highlights from Sembcorp’s 9M2011 Financial Results
• Turnover at S$6.8 billion, up 2%
• Profit from Operations* at S$925.7 million, down 2%
• Net Profit before EI at S$557.4 million, up 5%
• Net Profit after EI at S$557.4 million, down 1%
• EPS at 31.2 cents
• ROE (annualised) at 18.1%
– Strong operating results from the Utilities business
Source: Sembcorp Marine
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