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Sembcorp Posts 1Q2013 Net Profit of S$176.9 Million

May 08, 2013

Sembcorp Industries (Sembcorp) reported a net profit of S$176.9 million and turnover of S$2.4 billion in the first quarter of 2013 (1Q2013), comparable to 1Q2012’s net profit of S$176.7 million and turnover of S$2.4 billion. Sembcorp’s main profit contributors, the Utilities and Marine businesses, accounted for 49% and 39% of Group net profit respectively.

The Utilities business’ net profit was S$89.4 million compared to S$99.0 million in 1Q2012. The business was impacted by lower contribution from Singapore, mitigated by better performance from China and the Middle East. The Marine business’ 1Q2013 net profit was up 5% to S$72.0 million from S$68.7 million in 1Q2012, due to higher operating profit, offset by lower contribution from Cosco Shipyard Group. Meanwhile, the Urban Development business posted a net profit of S$6.7 million, an increase from S$4.7 million in 1Q2012.

Return on equity (annualised) for the Group was 14.6% and earnings per share amounted to 9.9 cents for the quarter. Economic value added was S$131.5 million while cash and cash equivalents stood at S$2.1 billion.

Tang Kin Fei, Group President & CEO of Sembcorp Industries, said, “In 1Q2013, we continued to position our company for long-term growth, in particular from our overseas investments. Our Utilities business achieved significant milestones in the execution and development of our pipeline of projects, which will grow our recurring income base. We secured a 25-year power purchase agreement for our coal-fired power plant in India, and a 20-year water purchase agreement for our Fujairah 1 Independent Water and Power Plant in the UAE. Our UK operation was also selected as the preferred bidder to develop a new energy-from-waste facility on our Wilton International site on Teesside. Meanwhile, our Marine business achieved a net orderbook of S$13.6 billion with completions and deliveries stretching till 2019.”

FY2013 Outlook

In 2013, the completion of Singapore’s liquefied natural gas (LNG) terminal is expected to increase natural gas supply to the country. In addition, over 2,400 megawatts of new generation capacity is expected to come onstream in 2013 and 2014. The increase in gas supply and generation capacity is expected to intensify competition and may impact the performance of our Singapore operations.

2013 will see a full year’s contribution from our newly-acquired power assets in China and the completion of our second woodchip boiler in Singapore in June.

The Utilities business, underpinned by long-term contracts and strong operational performance, will remain focused on the execution of its pipeline of projects and pursuit of new growth opportunities to deliver long-term growth.

Our Marine business has a strong net order book of S$13.6 billion with completion and deliveries stretching till 2019. This includes S$1.7 billion in rig orders and offshore platform contracts secured since the start of 2013.

The new yard at Tuas will commence operations in the second half of 2013 and the construction of the Brazilian yard is on track.

Overall, enquiries remain healthy across Marine’s diverse business segments of ship repair, ship conversion & offshore platforms and rig building. However, competition is intense and impacts margin.

Urban Development
The Urban Development business is expected to deliver a better operating performance in 2013.

The Group, underpinned by sound business fundamentals and a healthy pipeline of projects and orderbook, continues to be well-positioned to deliver long-term growth.

Highlights from Sembcorp’s 1Q2013 Financial Results

  • Turnover at S$2.4 billion, down 3%
  • Profit from Operations at S$313.3 million, up 10%
  • Net Profit flat at S$176.9 million
  • EPS at 9.9 cents
  • ROE (annualised) at 14.6%

*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)
Senior Manager
Group Corporate Relations
DID: +65 6723 3178
Email: [email protected]