Sembcorp Industries (U96) H1 2024 earnings summary

Executive summary

• Turnover for H1 2024 was S$3.208 billion, down 12% year-over-year, with net profit before exceptional items at S$532 million and total net profit at S$540 million, mainly due to lower Gas and Related Services and Renewables contributions, partially offset by strong Integrated Urban Solutions performance.

• Adjusted EBITDA fell 9% to S$1.042 billion, mainly from planned maintenance and lower pool gains in Singapore, partially offset by higher land sales in Vietnam and Indonesia.

• Interim dividend proposed at S$0.06 per share, up from S$0.05 last year, payable August 22, 2024.

• Lower profitability year-over-year was mainly due to planned major maintenance of a Singapore gas-fired power plant, with the impact mitigated by shortening the maintenance period.

Financial highlights

• Turnover declined by 12% year-over-year, mainly from the Gas and Related Services segment due to lower gas offtake and prices, and absence of high spot prices seen in Q2 2023.

• Free cash flow increased to S$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 S$8.4 billion, mainly due to acquisitions and pipeline build-up; net debt/EBITDA at 3.5x.

• Earnings per share (basic) was 30.30 cents, up 2% year-over-year.

Outlook and guidance

• Gas and Related Services earnings expected to improve in H2 2024 after completion of major maintenance.

• Renewables segment earnings expected to be lower in H2 2024 due to seasonality and weak macroeconomic conditions 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.

• Group remains focused on energy transition strategy and renewables growth.