Sembcorp Industries (U96) H2 2025 earnings summary

Executive summary

• Achieved resilient FY2025 results with underlying net profit at SGD 1 billion, despite a 10% turnover decline to SGD 5.8 billion and significant headwinds in Singapore, UK, and China renewables.

• Increased total dividend to SGD 0.25 per share, a 9% rise year-over-year, reflecting confidence in cash flow and business resilience.

• Continued strategic portfolio transformation, including major acquisition in Australia (Alinta) and divestment of non-core assets.

Financial highlights

• Turnover was SGD 5.8 billion, adjusted EBITDA SGD 2,016 million (down 2%), underlying net profit SGD 1 billion, and underlying EPS SGD 0.564.

• ROE at 18.2%, down from 20% in FY2024, mainly due to declining spreads and capital drawdowns.

• Free cash flow before expansion CapEx and equity investments was SGD 2.1 billion, including SGD 383 million from SembWaste sale.

• Net debt remained stable at SGD 7.8 billion, with cash and equivalents rising to SGD 1.1 billion.

• Net debt to adjusted EBITDA at 3.9x; weighted average cost of debt declined to 4.5%.

Outlook and guidance

• Expect continued margin pressure in Singapore and UK, with 3-5% of Singapore and ~50% of Senoko portfolios up for recontracting in 2026 at lower spark spreads.

• Renewables earnings expected to be flattish to slightly positive in 2026, with China facing further SGD 12 million impact from VAT policy change.

• Alinta acquisition in Australia expected to complete in 1H2026, strengthening earnings base and recurring cash flow.

• Ongoing development of 800,000 sqm of ready-built factories in IUS, with meaningful recurring income expected from 2028.