Tuesday, May 6, 2014

Sembcorp Industries - Q1 FY14 Results

Sembcorp Industries has just release its first quarter set of results for FY14. The highlights were:

  • Turnover  at $2.6 billion, up 12%
  • Profit from Operations at $300.9 million, down 4%
  • Net Profit at $184.8 million, up 5%
  • EPS at 10.3 cents
  • ROE (annualised) at 13.5%

My thoughts

Following my post back in Feb, we would have expected a much improved results for the first quarter. It appears that following the de-consolidation of Salalah, revenue and gross profit for the utilities sector was expectedly going to be affected. Nevertheless, the sector still managed to turn in some growth in its net profits, up 3% from the previous year.

As expected, contributions from overseas operations were going to be crucial for the growth in this sector. China overseas operations grow 33% to $16.7 million while the Singapore operations were growing only marginally. Moving forward, we should expect continuous growth from the overseas segment while the Singapore operations will tend to slow down due to intense competition.

The Marine business has also turned in improved profits from previous year, up 3%. Moving forward, we should be able to see marginal growth in this sector while its Brazil yard kicks off.

Q1 is usually the weaker quarter amongst the rest so we should see increase EPS once the next few quarters came in.

At $5.35, it appears that the price were still quite decent and investors are not yet accounting for its prospects of future growth. We hope and see and I believe they should perform quite well by the end of this FY14.

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