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Sembcorp Delivers Strong FY2011 Performance

February 27, 2012

– Utilities business achieves record profits of S$304.4 million, up 32%

Sembcorp Industries (Sembcorp) delivered a strong performance in 2011. Our net profit attributable to shareholders of the Company (net profit) for the full year 2011 (FY2011) grew 2% from S$792.9 million in 2010 to S$809.3 million, while turnover was up 3% from S$8.8 billion in the previous year to S$9.0 billion. Our main profit contributors continued to be our Utilities and Marine businesses, which accounted for 37% and 55% of Group net profit respectively. Our Utilities business delivered robust profit growth in FY2011, with net profit growing 32% to S$304.4 million. Record profits for the business were driven by good operating performance in Singapore, China and Middle East & Africa. Marine’s FY2011 net profit contribution to the Group was S$456.2 million compared to S$492.8 million in FY2010.

Return on equity for the Group was 20.4% and earnings per share amounted to 45.3 cents for the year. Economic value added was a positive S$728.2 million while cash and cash equivalents stood at S$3.0 billion.

In 4Q2011, Group net profit increased 10% to S$251.9 million against the previous year. Utilities delivered a strong 62% increase in net profit to S$88.2 million, growing its contribution to the Group’s net profit to 35% from 24% in 4Q2010. Marine’s 4Q2011 net profit was S$138.3 million, compared to S$145.8 million last year.

Mr Tang Kin Fei, Group President & CEO of Sembcorp Industries, said, “In 2011, Sembcorp delivered a good performance underpinned by our Utilities, Marine and Integrated Urban Development businesses. Our Utilities business achieved strong profit growth and record profits in the year. We also achieved significant milestones that demonstrate our ability to execute greenfield projects and extract value from brownfield acquisitions. In 2011, we successfully completed the first phase of our Salalah Independent Water and Power Plant in Oman and commenced development of our new energy and water facilities in Singapore, power plant in India and integrated new yard in Brazil. Following our acquisition of Cascal in 2010, its operations in 18 locations across eight countries were also successfully integrated into the Sembcorp Group and delivered a strong performance.

“While there may be further global economic challenges ahead, we remain confident of Sembcorp’s future. With a global footprint across six continents including growing emerging economies such as China, India, South Africa, Brazil and Chile, and a healthy pipeline of new projects that we have built up, our businesses are well-positioned to continue to deliver shareholder value and long-term growth.”

2011 Dividend
The Board of Directors is pleased to propose a final tax exempt one-tier dividend of 17.0 cents per ordinary share comprising an ordinary dividend of 15.0 cents and a bonus dividend of 2.0 cents per ordinary share for FY2011. If approved by shareholders, this will be paid on May 15, 2012.

FY2012 Outlook

Our Utilities business is expected to deliver a steady performance in 2012 despite our cogeneration plant in Singapore undertaking a planned major maintenance during the year. However, the weaker macro-economic environment may impact power and carbon prices and affect the performance of our energy businesses in Singapore and the UK.

With a healthy pipeline of projects both in Singapore and overseas, we are committed to delivering long-term growth through the focused execution of these projects as well as the active pursuit of new growth opportunities.

Our Marine business has a current net orderbook of S$6.3 billion with completion and deliveries stretching till the second quarter of 2015. This includes S$3.72 billion in contract orders secured in 2011 and S$1.3 billion worth of contracts secured since the start of 2012. Despite the global macro-economic uncertainty, fundamentals for the offshore oil and gas industry remain intact underpinned by high oil prices and projected increases in exploration and production spending. The offshore market continues to display signs of cyclical improvement, especially in the deep and ultra-deepwater segments fuelled by the growing needs of operators in multiple regions. Ship repair continues to see strong demand while alliance partners and long-term customers continue to provide a stable baseload for the business.

In Brazil, wholly-owned shipyard Estaleiro Jurong Aracruz is strategically positioned to support developments in one of the world’s fastest growing offshore oil and gas exploration markets. In Singapore, the Integrated New Yard facility in Tuas View Extension will become operational in 2013 and will nearly double Marine’s ship repair and ship conversion and offshore capacity from the current 1.9 million deadweight tonnes.

Overall, competition is intense though enquiries for the various segments of the market remain robust.

Integrated Urban Development
The Integrated Urban Development business is expected to deliver better performance in 2012 compared to 2011, in anticipation of contribution from the Sino-Singapore Nanjing Eco Hi-tech Island project. Our projects in Vietnam and China remain attractive destinations for foreign investors. However, the slowdown in the global economy may delay potential customer investment decisions that could impact the pace of our land sales and moderate the demand for commercial and residential space.

With the continuing crisis in Europe and weaker growth in developing countries, 2012 is expected to be a volatile year. Despite this uncertain global economic outlook, the Group, underpinned by resilient businesses and a healthy pipeline of projects, will continue to make every effort to position our businesses for sustained growth.

Highlights from Sembcorp’s FY2011 Financial Results

  • Turnover at S$9.0 billion, up 3%
  • Profit from Operations at S$1.3 billion, down 5%
  • Net Profit before EI at S$809.3 million, up 6%
  • Net Profit after EI at S$809.3 million, up 2%
  • EPS at 45.3 cents
  • ROE at 20.4%
  • Proposing final tax exempt one-tier dividend of 17.0 cents per ordinary share, comprising an ordinary dividend of 15.0 cents and a bonus dividend of 2.0 cents

*Profit from Operations = Earnings before Interest and Tax + Share of Associates and JVs’ results (net of tax).

– END –

For media and analysts’ queries please contact:

Melissa Yee (Ms)
Group Corporate Relations
DID: +65 6723 3326
Email: [email protected]

Aleve Co (Ms)
Group Corporate Relations
DID: +65 6723 3178
Email: [email protected]


Sembcorp Industries is a leading energy, water and marine group operating across six continents worldwide. With facilities with 5,600 megawatts of gross power capacity and over seven million cubic metres of water per day in operation and under development, Sembcorp is a trusted provider of essential energy and water solutions to both industrial and municipal customers. It is also a world leader in marine and offshore engineering as well as an established brand name in integrated urban development.

The Group has total assets of over S$11 billion and employs over 9,000 employees. Listed on the main board of the Singapore Exchange, it is a component stock of the Straits Times Index, several MSCI and FTSE indices as well as the Dow Jones Sustainability Asia Pacific Index.

Note to Editors: Please refer to the company as “Sembcorp” (with “S” in upper case and “c” in lower case), or “Sembcorp Industries” in full. Please also note that “Sembcorp” is not an abbreviation of “Sembawang Corporation” but a brand name in itself, and it is therefore incorrect to refer to our company as “Sembawang”, “Sembawang Corporation” or similar.