Sembcorp Industries (U96) H1 2024 earnings summary

Executive summary

• Turnover for H1 2024 was SGD 3.2 billion, down 12% year-over-year, with EBITDA at SGD 889 million and adjusted EBITDA at SGD 1.042 billion.

• Net profit before exceptional items was SGD 532 million, and net profit after exceptional items was SGD 540 million, up 2% year-over-year.

• Lower profitability was mainly due to planned major maintenance of a Singapore gas-fired power plant and weaker Gas and Related Services and Renewables segments, partially offset by strong Integrated Urban Solutions growth.

• Interim dividend increased to SGD 0.06 per share, up from SGD 0.05 last year, payable August 22, 2024.

Financial highlights

• EBITDA fell 10% year-over-year to SGD 889 million; adjusted EBITDA down 9% to SGD 1.042 billion.

• Free cash flow increased to SGD 948 million, mainly due to higher DPN receipts.

• Group ROE before exceptional items annualized at 21%, down from 26.6% last year.

• Gross debt increased to SGD 8.4 billion, mainly due to acquisitions and pipeline build-up; net debt/EBITDA at 3.5x.

Outlook and guidance

• Gas and Related Services earnings expected to improve in H2 2024 post-maintenance.

• Renewables segment earnings likely to be lower in H2 2024 due to seasonality and weak macroeconomy in China, partially offset by new projects.

• Integrated Urban Solutions outlook stable; full-year net profit before exceptional items expected to be stable barring unforeseen circumstances.

• Urban business targets 18,000 hectares of land and 1.5 million sqm of industrial properties by 2028, with >15% net profit CAGR from 2022-2028.