by winston » Thu Aug 15, 2019 9:47 am
not vested
Sembcorp Industries: Non-marine segment remains healthy
Sembcorp Industries (SCI) saw a 29% YoY fall in revenue and a greater fall in cost of sales, resulting in a 40% increase in gross profit in the quarter.
This led to a 20% increase in net profit to S$98m in 2Q19, bringing 1H19 net profit to S$191m or 45% of our full year estimate.
Results were dragged by the marine division, but Energy’s showing (S$92m profit) was better than expected, supported by India, Singapore, China and rest of the world.
In India, the energy business is expected to continue to improve.
In Singapore, completion of the sale of certain utilities facilities to ExxonMobil Asia Pacific is expected by the end of this year.
Major maintenance shutdowns for the power generation assets in Singapore will also take place in 2H19.
As for Urban Development, earnings growth is expected to continue into 2019.
Though SCI’s Energy and Urban Development segments are operating well, the Marine segment may pose a greater than expected drag on the group.
SCI has declared an interim dividend of S$0.02/share, same as 1H18.
Pending a briefing, we put our rating and fair value estimate under review.
Source: OCBC
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