Sembcorp Industries - OCBC Investment 2020-04-27: Continues On Transformation Plan

SEMBCORP INDUSTRIES LTD (SGX:U96) | SGinvestors.io SEMBCORP INDUSTRIES LTD (SGX:U96)

Sembcorp Industries - Continues On Transformation Plan

  • Supported by utilities.
  • Sembcorp Marine faces thinning order book.
  • Waiting for news on any restructuring.



Price action since last report



Energy (utilities) business still the main pillar of support

  • Since the start of 2018, Sembcorp Industries (SGX:U96) has achieved total divestment proceeds of S$600m, exceeding its earlier S$500m target.
  • Earnings meanwhile have been supported by the Energy business, where underlying profit grew 12% to S$360m in FY19, driven by better performance from overseas. However, if we were to include exceptional items, net profit would have been S$195m compared to S$312m. Impairments (which were flagged out in our earlier report in Feb) were the main reason for the difference.
  • Since 2016, net profit from renewables has increased nearly five-fold to S$80m. The Urban business has also been a good contributor, with a record net profit of S$117m in FY19, up 36% with the recognition of profit from property development with the successful completion and handover of Riverside Grandeur in Nanjing, China.


Challenging for Marine; needs help






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-04-27
SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.63 DOWN 2.130



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