Sembcorp H1 earnings flat at S$536 million on lower gas revenue

[SINGAPORE] Sembcorp Industries saw earnings fall 1 per cent to S$536 million for the first half ended June 30, on the back of lower turnover from its gas business.

This translates to a 1 per cent decrease in earnings per share to 30.13 cents.

Revenue for the half-year was down 8 per cent at S$2.9 billion, on the back of lower generation spreads in Singapore, as well as the absence of contributions from Phu My 3 power plant in Vietnam.

Nevertheless, Sembcorp proposed an interim dividend of 9 cents per share, up from 6 cents per share in the year-ago period, and said that it expects to maintain a “sustainable dividend payout” for the year. The interim dividend will be paid on Aug 26.

“The defensiveness of our portfolio will continue to underpin the resilience of our earnings,” said Sembcorp chief executive Wong Kim Yin in the earnings statement on Friday (Aug 8).

The gas segment’s turnover decreased by 11.1 per cent to S$2.1 billion; its earnings stood at S$330 million, down from S$339 million a year ago

Despite the fall in gas earnings, Sembcorp’s renewables segment saw earnings rise 22.1 per cent to S$138 million, due to higher contribution from India with better wind resources. The company’s gross installed renewables capacity also rose to 13.8GW in H1, from 10 GW a year ago.

However, the China renewable business was hit by lower tariffs and higher curtailment, where the amount of electricity generated has to be restricted.

The integrated urban solutions division’s earnings rose 9.6 per cent to S$80 million, supported by higher land sales in Indonesia and improved earnings from the water business in China.

Sembcorp shares ended Thursday were up 1.3 per cent to S$7.80 in pre-market trading on Friday.