SINGAPORE - Sembcorp Industries (Sembcorp) reported on Tuesday a 7.5 per cent year-on-year rise in net profit for its fourth quarter to $240.6 million, despite a 10.4 per cent drop in turnover to $2.66 billion in the period.
Earnings in the quarter were lifted partly by a 44 per cent year-on-year increase in profit of the conglomerate's utilities business to $109.4 million in the fourth quarter due to higher contribution from China and the UK. Utilities accounted for 58 per cent of the group's profit.
Marine segment's net profit however dropped 4 per cent year-on-year to $105.9 million due to tax incentives recognised in the same period in 2013, while urban development's net profit dropped 60 per cent to $15.1 million in the period due to lower contribution from Nanjing Eco Hi-tech Island project.
For the full year, net profit dropped 2.4 per cent year-on-year to $801.1 million. The figures were hit by special items such as an impairment made for utilities in the UK as well as fair value loss recorded following the reclassification of Gallant Venture as a for-sale asset. Excluding these items, net profit grew 3 per cent in 2014.
Sembcorp expects the key utilities segment to remain challenging this year amid the intense competition in the power market in Singapore, but the group will see its 1,320-megawatt power plant in India commencing operations in phases during 2015, chief financial officer Koh Chiap Khiong noted during the results announcement briefing.
For the marine segment, market conditions will also be dampened by the oil and gas sector's expenditure reduction amid the oil price slump, he added.
But chief executive Tang Kin Fei is confident that Sembcorp's balanced energy portfolio, with an accelerated growth in the renewable energy sector, will position the group for growth.
For 2014, a final dividend of 11 cents per share was proposed, bringing the year's total dividend to 16 cents.
Sembcorp's shares dropped two cents to close at $4.20 ahead of the results briefing.