Sembcorp Industries (U96) H2 2024 earnings summary

Executive summary

• Net profit before exceptional items was S$1.019 billion, surpassing S$1 billion for the second consecutive year, with FY2024 net profit up 7% to S$1.01 billion, despite a 9% decrease in turnover to S$6.417 billion and a 34% decline in Singapore wholesale power prices.

• Adjusted EBITDA reached S$2.1 billion, with EPS before exceptional items at 57.2 cents and ROE before exceptional items at 20.5%.

• Full-year dividend increased 77% to 23.0 cents per share, with a 40% payout ratio and 3.9% yield, reflecting strong earnings visibility and confidence in future performance.

• Portfolio transformation since 2020 has tripled net profit before exceptional items, with a 36% CAGR.

• Three growth engines—Gas and Related Services, Renewables, and Integrated Urban Solutions—drove resilient results and strategic positioning.

Financial highlights

• EBITDA was resilient at S$1.74 billion, only a 3% decline year-over-year, supported by long-term contracts and renewables.

• Free cash flow for FY2024 was S$1.8 billion, with strong DPN receipts and robust cash flow despite higher capex and equity investments.

• Net debt rose to S$7.8 billion, with Net Debt to Adjusted EBITDA at 3.8x (adjusted to 3.5x for projects under construction); gross debt increased to S$8.67 billion due to renewables acquisitions and new loans.

• Over S$2 billion invested in 2024, with 70% allocated to renewables; FY24 capex rose to S$1,491 million, mainly for renewables and gas projects.

• Share of results from associates and JVs increased 20% to S$370 million, driven by renewables and urban projects.

Outlook and guidance

• Gas and Related Services earnings expected to remain strong, supported by contracted portfolio and Senoko Energy stake.

• Renewables segment poised for growth, with full-year contributions from new assets and ongoing pipeline execution.

• Integrated Urban Solutions outlook stable, with further growth targeted after the sale of the waste business; Sembcorp Environment sale to complete in 1H2025, with a gain of at least S$100 million expected.

• Dividend of 23.0 cents per share is expected to be sustainable, reflecting confidence in future cash flows.

• Ongoing policy and economic uncertainties across markets may affect performance; focus remains on sustainable energy transition.