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Sembcorp Industries Limited’s Latest Results: Higher Revenue But Net Profit Fell 12%

Last Friday, Sembcorp Industries Limited (SGX: U96) released its 2018 third-quarter earnings update. As a quick introduction, Sembcorp Industries is a conglomerate with four major business segments: Utilities; Marine; Urban Development; and Other Businesses. The Marine segment is made up of Sembcorp Industries’ 61% ownership stake in the Singapore-listed marine engineering firm, Sembcorp Marine Ltd (SGX: S51).

Here are 10 things investors should know about Sembcorp Industries’ latest results:

1. Revenue for the reporting quarter improved by 36% year-on-year to S$3.02 billion.

2. The Utilities segment reported a 27% year-on-year increase in revenue to S$1.8 billion for the reporting quarter. Similarly, the Marine segment reported 60% year-on-year increase in revenue to S$1.2 billion.

3. EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the quarter fell by 39% year-on-year to S$300 million.

4. Profit from operations for the quarter declined by 29% year-on-year to S$216.5 million, driven mainly by weaker performance in the Marine segment.

5. Net profit for the quarter fell 12% year-on-year to S$82.3 million.

6. Similarly, diluted earnings per share (EPS) fell by 12.2% to 3.96 cents.

7. In the reporting quarter, operating cash flow was S$153.2 million, up from S$112.0 million seen in the corresponding quarter last year. The improvement was mainly due to better working capital management.

8. Sembcorp Industries’ total debt increased from S$9.8 billion at end-2017 to S$10.2 billion as at 30 September 2018. Excluding cash and cash equivalent of S$1.3 billion, net debt stood at S$8.9 billion as at 30 September 2018.

9. Return on equity (annualised) for the group was 4.6% while net asset value grew three cents year-on-year to S$3.83.

10. Here’s a brief comment by Sembcorp Industries on its outlook:

“The market environment is expected to remain challenging for the rest of the year. While a broader-based global recovery is underway, downside risks to global growth have risen amidst rising trade and geopolitical challenges. The Group remains confident that it has the right strategies and capabilities for the future.”

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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.