Sembcorp Industries (Sembcorp) posted a net profit of S$93 million for the first quarter of 2019 (1Q2019), up from S$77 million in 1Q2018, on improved performance from the Energy business. Turnover was S$2.5 billion compared to S$2.8 billion in 1Q2018.
• The Energy business’ net profit increased by 21% to S$85 million in 1Q2019 compared to S$70 million in 1Q2018, mainly driven by improved performance from India and recognition of peak winter availability payments for UK Power Reserve.
o Growing thermal portfolio
We officially opened the 230-megawatt Sembcorp Myingyan Independent Power Plant, the first competitively-tendered Independent Power Plant in Myanmar in March 2019 and completed the 427-megawatt Sirajganj Unit 4 combined cycle gas turbine power plant in Bangladesh in April 2019.
o Strengthening renewables portfolio
The business has signed contracts for over 10 megawatt peak of rooftop solar to date and completed a 2.8 megawatt peak rooftop solar farm atop YCH Group’s flagship facility, Supply Chain City, in Singapore.
o Capital recycling efforts continued
We divested Xinmin municipal water asset in China for a total consideration of RMB99 million (S$20 million), bringing total Group divestment proceeds to S$220 million since the beginning of 2018.
• The Urban business posted a net profit of S$7 million, with stable contribution from Vietnam but lower contribution from China.
• Competition for the Marine business remained intense. Net profit for 1Q2019 was lower due to continued lower overall business volume which impacted the absorption of overhead costs, offset by margin recognition from newly secured production floater projects and the delivery of a rig.
The Energy and Urban businesses continue to underpin the Group’s performance. However, the market environment continues to be challenging in 2019, especially for the offshore and marine sector. Global economic growth is projected to ease as markets face escalating risks including rising trade tensions and tightening financial conditions.
The Group remains focused on executing strategy, improving performance as well as strengthening its balance sheet, and is on track to deliver on its divestment programme.