Sembcorp Industries (Sembcorp) has posted group net profit before exceptional items (EI) and discontinued operation of $1.02 billion for FY2024 ended Dec 31, 2024, largely flat from $1.0 billion in FY2023, “despite a planned major maintenance in 1HFY2024”, says the Mainboard-listed firm. 

After EI and discontinued operation, FY2024 group net profit was $1.01 billion, 7% higher y-o-y.

Total turnover fell 9% y-o-y to $6.4 billion in FY2024, while 2HFY2024 turnover was 5% lower y-o-y at $3.2 billion. 

Net profit before EI and discontinued operation for 2HFY2024 was $487 million, 17% higher y-o-y mainly due to higher earnings in the Gas and Related Services and Integrated Urban Solutions segments.

According to Sembcorp, FY2024 EI totalling $1 million comprised a net gain of $3 million on disposal of assets and a $8 million gain on bargain purchase on the acquisition of two special purpose vehicles of Leap Green Energy in India.

These were partially offset by impairments of $6 million for project expenses incurred in Singapore and Vietnam, and a $4 million change in fair value of contingent consideration for a past acquisition in India upon collection of certain receivables.

Meanwhile, the sole net loss from discontinued operation in FY2024 refers to a loss on disposal of Chongqing Songzao Sembcorp Electric Power. 

Gas and Related Services

FY2024 net profit before EI for the Gas and Related Services segment fell 10% y-o-y to $727 million, due to a planned major maintenance of the cogeneration plant in Singapore and a 34% decline in Singapore wholesale electricity prices during the year. 

“We continued to secure long-term contracts for our Singapore portfolio, enhancing certainty and growing our earnings visibility,” says Sembcorp. 

As at end-2024, 98% of the group’s gas-fired power portfolio was underpinned by offtake contracts, with more than 60% of capacity locked in for over five years.

Through a “proactive contracting strategy”, the Gas and Related Services segment is now an anchor of the group’s earnings, says Sembcorp. 

In November 2024, Sembcorp completed the acquisition of a 30% interest in Senoko Energy, further bolstering the segment’s performance. The 600-megawatt (MW) hydrogen-ready power plant will also contribute to earnings upon completion in 2026. 

Renewables

Since end-2023, Sembcorp has secured 4.1 gigawatts (GW) of renewables capacity, bringing the group’s renewables capacity to 17.0GW, including 13.1GW of installed capacity. 

Net profit before EI for the Renewables segment fell 8.5% y-o-y to $183 million in FY2024. The Renewables segment was impacted by curtailment in China during the year, and lower wind speeds in India in 2H2024, says Sembcorp. 

Integrated Urban Solutions

The Integrated Urban Solutions segment posted 40% higher y-o-y net profit before EI of $169 million, following a turnaround in performance from the Urban business. 

Higher land sales were achieved in Vietnam and Indonesia, says Sembcorp. The Urban business has built up a gross land bank of 14,400ha for low-carbon industrial parks, and over 508,000 sqm of industrial leasable space from ready-built warehouses and factories.

Dividends

In view of the group’s strong performance, the board has proposed a final dividend of 17 cents, subject to shareholders’ approval. This is more than double the 8-cent final dividend paid this time last year. 

Together with the interim dividend of 6 cents per ordinary share paid in August 2024, total dividend for FY2024 will be 23 cents per ordinary share, representing a dividend yield of 3.9% based on the Feb 26 close price, and a higher dividend payout ratio of 40%, compared to 23% in FY2023.

Sembcorp’s FY2023 total dividend was 13 cents per ordinary share.

Moving forward, Sembcorp says it is “well-positioned” to capture the “once-in-a-generation growth opportunities” in energy transition, AI transformation and industrial realignment. “The three growth engines of Gas and Related Services, Renewables and Integrated Urban Solutions will drive Sembcorp’s strategic plan towards 2028 and beyond.”

Wong Kim Yin, group CEO of Sembcorp Industries , says: “Sembcorp delivered strong financial performance in 2024, underpinned by resilient earnings and robust cash flow. This year’s dividend increase reflects our confidence in the company’s future performance and ability to generate sustainable returns. We remain committed to strengthening our growth engines, driving long-term expansion while delivering increasing value to our shareholders.” 

Sembcorp will hold a results briefing later this morning. 

Shares in Sembcorp closed flat at $5.88 on Feb 26, up 14% over the past year.