Published November 8, 2008

Sembcorp boosts Q3 net profit by 24.8% to $144.9m

By VINCENT WEE
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SEMBCORP Industries has boosted third-quarter profit 24.8 per cent to $144.9 million on an 11.7 per cent increase in revenue to $2.5 billion.

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Click here for Sembcorp's financial results

For the first nine months, the main profit contributors continued to be marine and utilities, which accounted for 96 per cent of group profit. Overall, turnover rose 18.8 per cent to $7.2 billion, while profit increased 8.5 per cent to $406.2 million.

General and administrative expenses rose 20 per cent to $70.4 million in Q3 and diluted earnings per share rose from 6.45 cents to 8.08 cents. The utilities business continues to do well. Turnover increased 30 per cent to $1.3 billion in Q3 and by 33 per cent to $3.5 billion in the first nine months.

Nine-month profit fell to $170.4 million from $179.4 million previously, although in the previous corresponding period the UK's performance was boosted by a profit on the sale of land. Singapore and UK operations contributed $118.6 million and $52.9 million respectively. Q3 profit rose by a third to $66.3 million, but this was primarily due to gains from the transfer of transmission and distribution pipeline assets to PowerGas.

Turnover for the marine business increased 8 per cent to $3.4 billion in the first nine months on better performance by Sembcorp's rig-building, offshore, conversion and repair businesses. But Q3 revenue was flat at $1.1 billion.

Profit, however, continued to be strong, rising 68 per cent in Q3 to $86.1 million and 48 per cent for the first nine months to $220.5 million. This was due to higher operating margins from rig-building and shiprepair work and better contributions from associates.

While contributing only a small part to Sembcorp's overall profit, the environment, industrial parks and others/corporate businesses performed badly. Industrial parks profit fell 37 per cent to $7.2 million, mainly due to lower contributions from parks in Indonesia and Vietnam, which was partly offset by a higher contribution from an industrial park in China.

The environment and others/corporate businesses turned in losses of $4.1 million and $10.6 million respectively. The environment's loss ballooned from $460,000 in the previous Q3 as business was hit by impairment charges for plant and machinery. The others/corporate segment turned to a loss from a $3.9 million profit previously, mainly due to the weak performance of an offshore engineering associate in China.

Sembcorp shares closed flat at $2.50 yesterday.