Net orderbook stands at $8.65b, with deliveries stretching till 2012
By VINCENT WEE
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SEMBCORP yesterday posted an 8.6 per cent rise in first-quarter net profit to $133.6 million, driven mainly by increased contribution from its marine business. Turnover, however, stayed flat at $2.15 billion.
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| Solid pipeline: Utilities and marine continued to be Sembcorp's main profit contributors, accounting for 94 per cent of group profit |
Earnings per share rose to 7.52 cents from 6.91 cents a year ago.
The marine division's contribution to group net profit rose 32 per cent to $74 million mainly due to higher operating margins from its rigbuilding and shiprepair businesses.
This was, however, partially offset by lower contribution from Cosco Shipyard Group.
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The year-to-date net orderbook now stands at $8.65 billion, with completions and deliveries stretching till early 2012.
The utilities division's net profit, however, was 16 per cent lower at $51.1 million compared with $60.9 million for Q108 as turnover fell 38 per cent to $696.2 million mainly due to the drop in high sulphur fuel oil rate and lower offsite power sales in the UK as a result of the expiry of some favourable supply contracts.
The utilities and marine businesses continued to be Sembcorp's main profit contributors, accounting for 94 per cent of group profit.
Revenue was also hit by the pound sterling depreciating about 23 per cent compared with Q108, resulting in lower turnover in Singapore dollar terms for Sembcorp's UK operations.
Turnover for the marine business increased 49 per cent to $1.36 billion, mainly due to higher percentage of completions achieved in the rigbuilding, offshore, conversion projects and higher repair sales.
Environment business turnover dropped by 10 per cent to $47.4 million, mainly due to lower selling prices and sales tonnage of recyclables.
Q109 utilities' net profit fell as a weaker showing in the UK operations offset good performances in Singapore, China, Vietnam and the UAE.
Looking ahead, Sembcorp expects the global economic downturn and slowdown in the petrochemical and chemical sector to pose some challenges for its business.
Its UK operations will also see the full-year impact of the expiry of certain favourable supply contracts during the year although Sembcorp expects its other sites in Singapore, China, Vietnam and the Middle East to be less affected due to long-term contracts with customers.
The economic downturn and resulting credit crunch may lead to some deferments and cancellations, but Sembcorp does not expect any adverse material impact on its marine division's performance.
'Despite the difficult global market conditions, Sembcorp's profit grew by 9 per cent in Q109, reflecting the underlying strength of our businesses,' said group president and CEO Tang Kin Fei. Backed by our track record and healthy orderbook, 'Sembcorp will continue to maintain our strong positions in both our utilities and marine businesses and steer a steady course for the group.'
Sembcorp shares closed unchanged at $3.09 yesterday.
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