Sembcorp Industries (U96) H2 2024 earnings summary

Executive summary

• Net profit before exceptional items was S$1.019 billion in FY2024, stable year-over-year and surpassing S$1 billion for the second consecutive year, with total net profit at S$1.011 billion, up 7% from FY2023.

• Turnover declined 9% to S$6.417 billion, mainly due to lower contributions from Gas and Related Services and a 34% drop in Singapore wholesale power prices.

• Adjusted EBITDA reached S$2.1 billion, with EPS before exceptional items at S$0.57 and ROE before exceptional items at 20.5%.

• Full-year dividend increased 77% to S$0.23 per share, with a 40% payout ratio and 3.9% yield.

• Strategic focus on Gas and Related Services, Renewables, and Integrated Urban Solutions, positioning for long-term growth.

Financial highlights

• EBITDA was resilient at S$1.74 billion, down 3% 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 generation despite higher capex.

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

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

• 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.

• Dividend of S$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.