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A Quick Update on Sembcorp Industries Limited’s Latest Performance: Net Profit Grew 21%

On 15 May, Sembcorp Industries Limited (SGX: U96) released its 2019 first-quarter earnings update. Sembcorp Industries is a bona fide conglomerate with four major business segments: Energy, Marine, Urban Development, and Other Businesses. The Marine segment is made up of Sembcorp Industries’ 61% ownership stake in 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 fell 10% year on year to S$2.5 billion.
  2. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter jumped 22% year on year to S$349 million.
  3. Profit from operations for the quarter also improved by 4% year on year to S$223 million, driven mainly by stronger performance in the Energy segment.
  4. Net profit for the quarter was up by 21% year on year to S$93 million.
  5. Similarly, diluted earnings per share (EPS) surged 31% to 4.7 Singapore cents.
  6. In the reporting quarter, operating cash flow was S$332 million, up from S$191.0 million seen in the corresponding quarter last year. The improvement was mainly driven by higher profit and better working capital management.
  7. Sembcorp Industries’ total debt fell from S$10.7 billion at the end of 2018 to S$10.5 billion as of 31 March 2019. Excluding cash and cash equivalents of S$1.7 billion, net debt stood at S$8.8 billion as of 31 March 2019.
  8. The Energy segment reported a 21% year-on-year increase in net profit to S$85 million for the reporting quarter. On the other hand, the Urban segment saw net profit decline by 30% year on year to S$7 million, while the Marine segment just broke even for the reporting quarter.
  9. No dividend was declared for the reporting quarter.
  10. Here’s a brief comment by Sembcorp Industries on its outlook:

“The Energy and Urban businesses continue to underpin the Group’s performance. However, the market environment continues to be challenging in 2019, especially for the offshore and marine sector. Global economic growth is projected to ease as markets face escalating risks including rising trade tensions and tightening financial conditions.

The Group remains focused on executing strategy, improving performance as well as strengthening its balance sheet, and is on track to deliver on its divestment programme.”

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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.