3 Things That Investors Should Know About Sembcorp Industries Limited Now

Sembcorp Industries Limited (SGX: U96) is a conglomerate with two important business segments: Utilities and Marine. The latter comes mainly from Sembcorp Industries’ 61% ownership stake in Sembcorp Marine Ltd (SGX: S51).

Here are three things about Sembcorp Industries that investors may want to know.

1. Latest quarterly earnings

Sembcorp Industries had released its 2016 first-quarter earnings only last week.

The conglomerate did not have a good start to the year with its revenue and profit both down by double-digit percentages when compared to the same period a year ago. In the quarter, Sembcorp Industries’ revenue had slipped by 19% to S$1.9 billion while its profit had declined by nearly a quarter to S$107 million.

It’s also worth noting that the conglomerate’s net debt to shareholders’ equity ratio came in at 117% for the reporting quarter, up from the 93% seen at end-2015.

2. A consistent history of paying a dividend

Sembcorp Industries has consistently paid an annual dividend going back to at least 1998. Along the way, its dividend had even grown from just S$0.025 per share in 1998 to S$0.17 in 2013. Unfortunately, the conglomerate’s business results have been softer these past few years, resulting in its dividend falling to ‘just’ S$0.11 per share in 2015.

At Sembcorp Industries’ current share price of $2.70, it has a dividend yield of 4.1% thanks to its 2015 dividend.

3. A recent increase in the price of oil

The price of oil was sitting above US$100 per barrel in 2014. But, it had fallen to a low of less than US$30 earlier this year. This drastic decline has brought about significant cuts in capital spending throughout the oil & gas industry globally, thereby affecting Sembcorp Marine’s business.

But, oil has started climbing and now sits around the US$45 per barrel range. If the price of oil continues its ascent, it might encourage oil producers to restart their spending programmes.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.