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5 Quick Things Investors Should Learn About SembCorp Industries Ltd

SembCorp Industries Ltd (SGX: U96) is one of the cool companies in Singapore which shares webcasts of their quarterly earnings presentations (the link for Sembcorp Industries’ latest webcast is here).

SembCorp Industries has two main business segments: Utilities and Marine. In particular, the latter is represented mostly through Sembcorp Industries’ majority ownership of marine-engineering firm SembCorp Marine Ltd  (SGX: S51).

You can read more about SembCorp Industries in here.

Below are five useful (additional) things I learned from listening to SembCorp Indsutries’ fourth quarter webcast:

  1. On Sembcorp Industries’ recent investment to acquire a 60% stake in Green Infra, a renewal energy company from India, Group Chief Financial Officer Koh Chiap Khiong highlighted that the Indian firm is well spread out in six renewable-resource-rich states in India. This also represents Sembcorp Industries’ first step into the solar energy segment, and serves as a platform for the firm to grow renewable energy production within India and outside India. Chief Executive Officer Tang Kin Fei mentioned that Green Infra has a projected energy production growth rate of 200 megawatts to 300 megawatts per year, and SembCorp Industries is invested with a long term horizon for this business.
  2. On a whole, Sembcorp Industries’ renewable energy capacity has grown to make up 14% of its total power capacity (including facilities in operation or under development). The company is aiming for a balanced portfolio of thermal and renewable energy overall.
  3. Referring to the power market in India, Tang said that it was less about supply and demand in the market; that’s because the country still has a shortage of power supply and is actually rationing power supply. In general, there are three pricing terms in India: short term, medium term (three to seven years) and long term (ten to fifteen years). The short term is the most profitable one, but Tang questioned how long this shortage scenario would last, and felt that it was more prudent to have a balance between the three pricing terms.
  4. Moving on to the Marine segment, Koh highlighted that 46% of its $4.2 billion in new contracts secured in 2014 were from customers looking for conversions and to build platforms. SembCorp Industries was also excited about Phase II of its SembMarine Integrated Yard as it will bring new capabilities which the firm considers to be the “best in the region.” Phase II is expected to completed in 2017.
  5. For the new shipyard in Brazil, Tang also pointed to the two major equipment installations there – that is, the floating dock, and the heavy lift crane – which will provide SembCorp Industries with the ability to serve the market in the region well.

Foolish takeaway

To buy and hold a company’s shares for the long term also means keeping up with developments in the firm.

The access to management teams via webcasts gives the Foolish investor a fair chance to judge for themselves whether they’d like to be invested alongside those teams. It also helps us put together a more complete thesis around a company and keep up with developments in its industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.