Update on Engineering & Construction - Profit Guidance for year ending December 31, 2002

Nov 29, 2002

SembCorp Industries Ltd
(Incorporated in the Republic of Singapore)

PROFIT GUIDANCE FOR YEAR ENDING DECEMBER 31, 2002

SembCorp Industries announces that its wholly-owned engineering and construction subsidiary SembCorp Engineers & Constructors (SembE&C) is now expected to incur a loss of approximately $127 million for FY2002. 

This anticipated loss is principally caused by difficulties in two major projects, as follows:
· A one-time write-off of foreseeable losses totalling $85 million from the Tuas View B2b land reclamation project is due to stoppage of sand supply resulting from a restriction on sand export by the Indonesian government in end August 2002. Subsequent efforts over the last three months to resolve the situation and to secure alternative sand sources have not borne fruit and it is now clear that there is no resolution in sight. SembE&C is presently in discussions with the client, JTC, to discontinue the project.
· Based on a report submitted by independent international experts in late October 2002, SembE&C assesses there will be foreseeable losses of $22 million for the Kranji Deep Tunnel Sewerage project due to difficult ground conditions. This report also shows that such complex ground conditions could not have been foreseen by an experienced engineer based on soil data available.

As a consequence, SembCorp Industries now expects its FY2002 net profit (including exceptional items) to show an increase only in the mid-teens in percentage terms over FY2001.

For further details, presentation slides used at press and analyst briefings held by SembCorp Industries on November 29, 2002, are attached to this announcement.


By Order of the Board
Linda Hoon Siew Kin
Group Company Secretary

For more information please contact:
Ms Beverley Wong
Executive
Group Corporate Relations
SembCorp Industries
Tel: 63579153
Fax: 63522163
Email: beverley.wong@sembcorp.com.sg

Submitted by Linda Hoon Siew Kin, Group Company Secretary on 29/11/2002 to the SGX

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