SINGAPORE - Utilities and marine group Sembcorp Industries expects the performance of its energy business to be markedly lower than last year due to reduced demand and falling prices.
Sembcorp said on Monday (May 18) that while its energy operations continue to be supported by long-term contracts, the impact of the pandemic and the reduction in economic activity amid lockdowns have hit the business.
Power demand in Singapore, India and Britain declined by about 10 to 25 per cent in April compared with the same month last year, the company noted.
Sembcorp said that while business conditions remain bleak, it expects to maintain positive operating cash flow in 2020 due to its long-term contracts and diversified portfolio of businesses.
It expects losses to continue for its marine division, the group added.
Activity levels remain low across the board apart from the repairs and upgrades segment, with overall business volumes expected to further weaken over the rest of the year.
The effects of the pandemic and low oil prices on projects' final investment decisions will continue to hit new orders in coming quarters, it added.
SembMarine said its priority is to ensure adequate liquidity to sustain operations and tide itself over the severe downturn, with the focus staying on opportunities less affected by the business climate.
It added that containment measures undertaken by governments around the world have led to delays in regulatory and other approvals for projects undertaken by its urban segment.
Economic uncertainty is also expected to lead to lower take-up and demand, or delayed launches for some of its integrated developments and properties.