In the course of the year, we increased our Medium Term Note Programme from S$500 million to S$2 billion in line with our strategy to diversify our sources of funding. We continue to seek to expand our relationships with banks in Singapore for access to bilateral facilities. The increase in funding resources will allow SembCorp Industries to grasp opportunities as they arise.

We reduced our net borrowings by about S$900 million by utilising proceeds from divestments and cashflows generated from our operations. Net gearing was reduced to 0.6 times from 1.3 times, attributable to the lower borrowings and improved shareholders’ funds from the share placement during the year, and proceeds from divestments and profits for the year.

We are focused on maintaining an appropriate mix of committed and uncommitted facilities, fixed and floating rate borrowings, prudent financial ratios and reducing the cost of funding. As such, committed funding consists of 84 per cent of the Group’s borrowings and 66 per cent of the overall debt portfolio is not exposed to interest rate fluctuations. The maturity profile of SembCorp Industries is now more evenly spread over different maturities that reduce the impact of refinancing risks. The weighted average cost of funding has been reduced to 4.0 per cent from 4.6 per cent in the previous year.

We have made a concerted effort towards improvement of our cashflow generation and have generated an improved cashflow from operations of S$530 million compared to a negative cashflow of S$109 million in the previous year. This improvement of cashflow by S$639 million was achieved through greater efficiency of debt collection and a more effective creditor management.

We have strengthened our risk management through an Enterprise Risk Management programme to raise the awareness of the importance of risk management in all activities carried out throughout SembCorp Industries. Steps are underway to incorporate risk management perspectives in core operational activities.

Chief Risk Officers have been appointed in SembCorp Industries and its Key Businesses to coordinate and implement the Enterprise Risk Management programme and a structured and systematic approach towards risk management, risk assessment plans and reporting.

A systematic approach has been introduced for SembCorp Industries and its Key Businesses to review financial discipline in the Group.

We have set up a certification process for our major subsidiaries to confirm their commitment to and compliance with a prudent financial discipline framework.
The framework provides for checklists to systematically highlight the requirements of new accounting standards, recognition of foreseeable losses and impairment of assets. It also establishes the propriety of revenue and cost recognition, assets valuation, liabilities recording and allows for early identification of areas of potential exposures which can then be addressed to minimise any adverse impact to the Group.


% 2001

  Funded bank facilities, capital markets and available funds          
  Funded facilities available for drawdown 4,520   3,379    
  Cash and cash equivalents         482           409    
  Total facilities and available funds 5,002   3,788    
  Less: Amount drawn down     (1,615)      (2,384)    
  Unutilised funded facilities and funds available      3,387        1,404    
  Unfunded bank facilities          
  Unfunded facilities available for drawdown 1,285   1,076    
  Less: Amount drawn down       (890)         (736)    
  Unutilised unfunded facilities available        395          340    
  Total unutilised facilities and funds available      3,782       1,744    
  Committed facilities          
  Committed facilities available 1,517   1,669    
  Amount drawn      1,517       1,669    
  Maturity profile          
  Due within 1 year 408 22 1,153 44  
  Due between 1 to 2 years 252 14 21 1  
  Due between 2 to 5 years 575 32 455 17  
  Due after 5 years 580 32 979 38  
    1,815 100 2,608 100  
  Debt mix          
  Floating rate debt 612 34 1,442 55  
  Fixed rate debt 1,203 66 1,166 45  
    1,815 100 2,608 100  
  Currency denomination of debt          
  SGD 1,562 86 2,223 85  
  USD 176 11 339 13  
  Others 77 5 46 2  
    1,815 100 2,608 100  
  DEBT RATIOS          
  Interest cover ratio          
  Net profit before interest, tax, depreciation and amortisation 508   484    
  Interest on borrowings 94   90    
  Interest cover (times) 5.4   5.4    
  Debt/equity ratio          
  Non-recourse project financing 657 36 562 22  
  Long term debt 811 45 947 36  
  Short term debt 347 19 1,099 42  
    1,815   100 2,608   100  
  Less : Cash and cash equivalents       (482)         (409)    
  Net Debt      1,333      2,199    
  Net Debt excluding project financing        772       1,777    
  Net Gearing excluding project financing (times) 0.4   1.0    
  Net Gearing including project financing (times) 0.6   1.3    
  Cost of Funding          
  Floating   2.8   3.7  
  Fixed   4.5   5.2  
  Weighted Average Cost of Capital   4.0   4.6