Sembcorp Industries (U96) H2 2024 earnings summary

Executive summary

• Net profit before exceptional items reached SGD 1.019 billion, surpassing SGD 1 billion for the second consecutive year, despite a 9% decrease in turnover to SGD 6.4 billion and a 34% decline in Singapore wholesale power prices.

• Adjusted EBITDA was SGD 2.1 billion, with EPS before exceptional items at SGD 0.57 and ROE before exceptional items at 20.5%.

• Proposed final dividend of SGD 0.17, total dividend SGD 0.23 per share, a 77% increase year-over-year, with a 40% payout ratio and 3.9% yield.

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

• Strong earnings predictability supported by long-term contracts in Gas and Related Services and growth in Renewables and Integrated Urban Solutions.

Financial highlights

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

• Free cash flow for FY2024 was SGD 1.8 billion, with strong DPN receipts and robust cash generation despite higher capex.

• Net debt rose to SGD 7.8 billion, with Net Debt to Adjusted EBITDA at 3.8x, adjusted to 3.5x for projects under construction.

• Over SGD 2 billion invested in 2024, with 70% allocated to renewables.

• Share of results from associates and JVs increased 20% to SGD 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.

• Dividend of SGD 0.23 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.