Boosted by higher land sales in China in its urban development business, conglomerate Sembcorp Industries posted a substantial rise in first-quarter earnings.
Net profit jumped 11.3 per cent to $119.1 million for the first three months to March 31. Revenue rose in tandem, growing by 12.9 per cent to $2.14 billion for the first quarter.
Earnings per share came in at 6.13 cents, up from 5.45 cents a year ago.
The group attributed its performance mainly to a soaring increase in profit from its urban development business derived from the recognition of land sales in Nanjing.
Net profit for this segment for the quarter rose more than 30 times to $37 million, up from just $1.2 million for the same period a year ago.
AT A GLANCE
NET PROFIT: $119.1 million (+11.3%)
TURNOVER: $2.1 billion (+12.9%)
By contrast, the utilities segment contributed $55.3 million in net profit for the quarter, 27 per cent less than the same period last year.
This was attributed to its second thermal power plant in India, which began commercial operations in February. The group said the plant was adversely affected by short-term power tariffs due to a lack of long-term power purchase agreements available in the market.
The marine business contributed $24.1 million in net profit, a decrease of 28 per cent compared with the same period last year.
This was due to lower contribution from rig-building projects, costs incurred for a floater project which awaits the client's finalisation, as well as higher finance costs.
The company added that it was cautiously optimistic about the marine segment's new orders for production facilities in the next few years as global exploration and production spending is expected to increase this year.
It also said the company's urban development business is expected to deliver better performance this year, buoyed by land sales in Vietnam, China and Indonesia.
Net asset value per share was $3.78 as at March 31, up from $3.75 a year earlier.
The group's better showing comes as Mr Neil McGregor succeeds Mr Tang Kin Fei as group president and chief executive last month.
Mr Tang retired after 30 years with the group. Mr McGregor had been the senior managing director and head of energy and resources at Temasek International, as well as a director on Sembcorp Industries' board.
Mr McGregor said in a press release yesterday the group would be "undertaking a complete review of our businesses and strategic direction" over the next few months.
"As we position Sembcorp for the future, our focus will be on performance, sustainability and value creation," he said.
"We face a challenging macro environment with rapidly changing market dynamics. This requires us to focus on cost discipline and strengthening operating performance," he added.