Sembcorp Industries (U96) H2 2025 earnings summary

Executive summary

• Underlying net profit reached SGD 1 billion in FY2025, stable year-over-year, despite lower earnings from Gas and Related Services and significant headwinds in Singapore, UK, and China renewables.

• Turnover declined 10% to SGD 5.8 billion, mainly due to weaker Gas and Related Services, partially offset by Renewables and Integrated Urban Solutions growth.

• Total dividend increased 9% to SGD 0.25 per share, reflecting confidence in cash flow and business resilience.

• Strategic portfolio transformation continued, including the Alinta Energy acquisition in Australia and divestment of non-core assets.

Financial highlights

• Adjusted EBITDA was SGD 2,016 million, down 2% from FY2024; reported EBITDA was SGD 1,520 million, down 12%.

• Underlying EPS was SGD 0.564, down 1% year-over-year.

• ROE at 18.2%, down from 20% in FY2024.

• Free cash flow before expansion CapEx and equity investments was SGD 2.1 billion, driven by divestment proceeds and lower investments.

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

Outlook and guidance

• Margin pressure expected 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 Energy 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.

• Approximately 80% of the contracted portfolio in Singapore is locked in for five years or more, providing earnings visibility.