Sembcorp Industries reports 23.1% drop in Q1 net profit

Sembcorp’s new co-generation plant on Jurong Island. -- PHOTO: SEMBCORP INDUSTRIES 
Sembcorp’s new co-generation plant on Jurong Island. -- PHOTO: SEMBCORP INDUSTRIES 

SEINGAPORE - Sembcorp Industries reported a 23.1 per cent year-on-year drop first quarter net profit to $142.21 million, as the utilities and marine conglomerate continued to be pressured by challenging market conditions.

Revenue in the three months to March 31 went down 11 per cent year-on-year to $2.34 billion, as utilities profit contribution dropped 18.7 per cent to $74.5 million in the period amid the intense competition in the domestic power market.

Profit contributed by marine businesses also dropped 12.9 per cent to $64.7 million. This followed a 13.6 per cent year-on-year drop in first quarter net profit reported by its subsidiary Sembcorp Marine, which was hit by lower rig-building and repair revenue.

The marine unit's net orderbook to-date stands at $10.6 billion with deliveries stretching into 2019, but outlook remains challenging.

"The ongoing cutback in global exploration and production expenditure has resulted in the scarcity of new orders for the industry this year. Competition for new projects remains intense," Sembcorp Industries said in its results announcement after market close on May 7.

But overseas utilities business will perform well, the company said, citing progress in India's power plant projects as a driver.

Chief executive Tang Kin Fei said: "We continue to focus on project execution, as well as on enhancing operational excellence and efficiency, to manage our costs and maximise earnings.

"Underpinned by sound business fundamentals and a healthy pipeline of projects, Sembcorp remains committed to delivering long-term value and growth."

Earnings per share went down 23.6 per cent year-on-year to 7.83 cents, while net asset value stood at $3.31 per share, up 1.5 per cent from $3.15 at the end of 2014.