Sembcorp Industries Ltd. · SGX:U96
Sembcorp Industries — H1 2008 Earnings Presentation
35 slides from Sembcorp Industries's earnings presentation, Aug 6, 2008
Slide 1: 1H2008 Results Announcement
1H2008 Results Announcement August 6, 2008
Slide 2: Scope of Presentation
Scope of Presentation • CEO’s Report • Financial Review • Operations Review • Group Outlook 2
Slide 3: CEO's Report
CEO’s Report Tang Kin Fei Group President & CEO
Slide 4: 1H2008 Performance Round-Up
1H2008 Performance Round-Up Turnover of $4.7bn, up 23% PBT of $435m, up 11% PATMI of $261m, up 1% PATMI up 6%, excl. tax write-back in 1H2007 Return on Equity (annualised) at 17% Strong balance sheet and cash flow • Interest cover at 18 times • Operating cash flow of $463m 4
Slide 5: Strong Fundamentals
Strong Fundamentals Growing baseload, earnings visibility Utilities • $307 million of new and renewed long-term contracts secured • US$5.5 billion conditional gas deal signed for the importation of an additional 90 BBtu Marine & Offshore Engineering • $9.6 billion net order book as at August 5, 2008
Slide 6: Capabilities to Capture Growth Opportunities
Capabilities to Capture Growth Opportunities Providing Total Water Solutions Providing total water solutions as a developer, owner and operator of water and wastewater assets using cutting-edge, energy-efficient and environmentally- friendly technologies, focusing mainly on industrial sites and citi
Slide 7: A Growing Pipeline of Water Projects
A Growing Pipeline of Water Projects Additional 428,000m³/day water capacity since January 2008 6.5 Target capacity: • Secured 228,000 6.0 6 million m3/day in operation and under development by 2012 m3/day DBOO Changi NEWater plant Capacity (million m3/day) • Building new 40,000 5.5 m3/day industria
Slide 8: Financial Review
Financial Review Lim Joke Mui Group CFO
Slide 9: Group Profit & Loss
Group Profit & Loss ($M) 1H08 1H07 ∆% Turnover 4,733 3,852 23 EBITDA 446 412 8 EBIT 349 324 8 PBT 435 394 11 PATMI 261 258 1 PATMI excl. tax writeback in 1H07 261 247 6 EPS (cents) 14.7 14.5 1 9
Slide 10: Group Turnover
Group Turnover ($M) 1H08 1H07 ∆% Utilities 2,226 1,654 35 Marine 2,300 2,005 15 Environment 107 100 6 Industrial Parks 8 15 (45) Other Businesses 92 78 19 TOTAL 4,733 3,852 23 10
Slide 11: Group PATMI
Group PATMI ($M) 1H08 1H07 ∆% Utilities 104.1 129.4 (20) Marine 134.4 98.2 37 Environment 4.0 7.6 (48) Industrial Parks 13.9 16.0 (13) Other Businesses 11.0 13.1 (16) Corporate (6.1) (6.0) (2) TOTAL 261.3 258.3 1 11
Slide 12: Utilities Turnover & PATMI
Utilities Turnover & PATMI ($M) 1H08 1H07 ∆% TURNOVER Singapore 1,858.6 1,218.8 52 UK 355.9 419.6 (15) Other countries 29.9 29.1 3 Total Turnover 2,244.4 1,667.5 35 PATMI Singapore 70.0 51.3 36 UK 34.4 70.3 (51) Other countries 8.3 12.5 (34) Corporate & Others (8.6) (4.7) (83) Total PATMI 104.1 129.
Slide 13: Group Capex
Group Capex ($M) 1H08 Fixed Asset Items 165.6 – Utilities 107.5 – Marine 52.4 – Environment 3.1 – Other Businesses 2.6 Equity Investments 18.3 – Utilities 17.6 – Industrial Parks 0.7 TOTAL 183.9 13
Slide 14: Group Cash Flow
Group Cash Flow ($M) 1H08 1H07 CASH FLOW FROM OPERATING ACTIVITIES - before changes in working capital 463 408 - changes in working capital 759 187 - tax paid (23) (37) 1,199 558 CASH FLOW FROM INVESTING ACTIVITIES - divestment proceeds & sale of fixed assets 33 112 - acquisitions of investments (1)
Slide 15: Group Borrowings
Group Borrowings ($M) 1H08 1H07 ∆% PF loans 448 511 Long-term 392 398 Short-term 255 432 Gross 1,095 1,341 Less: Cash and FD (1,743) (1,297) Net Debt / (Cash) (648) 44 Net Gearing Ratio Net Cash 0.01 Exclude PF* Net Debt / (Cash) (844) (306) Net Gearing Ratio Net Cash Net Cash * PF – Non-recourse pr
Slide 16: Financial Indicators
Financial Indicators ($M) 1H08 1H07 (ACTUAL) Before EI EPS (cents) 29.4* 31.3 ROE (%) 17.1* 19.0 ROTA (%) 8.8* 9.6 Interest Cover (times) 18 16 After EI EPS (cents) 29.4* 29.6 ROE (%) 17.1* 18.0 ROTA (%) 8.8* 8.7 Interest Cover (times) 18 15 Per Share NAV ($) 1.57 1.70 NTA ($) 1.51 1.64 Economic Val
Slide 17: Operations Review
Operations Review Tang Kin Fei Group President & CEO
Slide 18: Utilities
Utilities Change 1H08 % Turnover ($M) 2,244.4 ( 35) EBITDA ($M) 205.7 (6) EBIT ($M) 149.9 (12) PATMI ($M) 104.1 (20) ROE* (%) 19 • Growth from Singapore operations • Performance affected by UK unit - expiry of favourable supply contracts, depreciation of the Sterling and a negative mark-to-market po
Slide 19: Utilities: Key Developments, Singapore
Utilities Key Developments Singapore • Awarded DBOO Changi NEWater project to be operational 2009/2010 • Signed a US$5.5 billion conditional Gas Sales Agreement to import an additional 90 BBtu per day of natural gas from Indonesia. Gas delivery is targeted for 2010/2011 • Completed the 400tph very h
Slide 20: Utilities: Key Developments, UK
Utilities Key Developments UK • Enhanced onsite steam capacity with the completion of 120tph package boilers • Sembcorp Biomass Power Station passed performance test. Strong electricity prices enhances fundamental economics of project • Delays in the issue of carbon credits until IT trading system i
Slide 21: Utilities: Key Developments, China
Utilities Key Developments China • Nanjing Sembcorp SUIWU turns profitable • Growing beachheads – Nanjing Chemical Industrial Park • Completion of a 30,000 m3/day high salinity wastewater treatment plant • Expansion of wastewater capacity by 12,500 m3/day. Expected completion by 1H2009 – Zhangjiagan
Slide 22: China: A regional hub of growth
Utilities Key Developments China: A regional hub of growth 2008 2009 and beyond Shenyang Water Works Facilities: 160,000 tpd (2H2008) Industrial water supply network: 100,000 tpd (2H2008) Tianjin WWT plant: 10,000 tpd (2H2008) Zhangjiagang WWT plant: 20,000 tpd WWT plant: 15,000 tpd Phase II expansi
Slide 23: Utilities: Other Markets
Utilities Key Developments Other Markets • Phu My 3 (Vietnam) and Fujairah 1 IWPP (UAE) operations continue to perform well • Regional HQ set up in Abu Dhabi to spearhead growth in MENA Phu My 3 Fujairah 1 IWPP 23
Slide 24: MENA: A regional hub of growth
Utilities Key Developments MENA: A regional hub of growth UAE: Fujairah • Existing 535MW and 100MiGD IWPP • 225MW expansion under construction (1Q2009) • Exploring additional 20MiGD desalination capacity UAE: Abu Dhabi • MOU with ZonesCorp to provide centralised utilities and other services in speci
Slide 25: Marine
Marine Change 1H08 (%) Turnover ($M) 2,302.2 (15) EBITDA ($M) 223.6 (28) EBIT ($M) 190.9 (29) PATMI ($M) 219.6 (38) ROE* (%) 27 • Strong top and bottom-line growth • Net order book of $9.6 billion as at August 5, 2008 Jack-up Jack-uprig rigbuilt builtby bySembcorp SembcorpMarine Marine Note: Figures
Slide 26: Marine: Key Developments
Marine Key Developments • Net order book at $9.6 billion as at August 5, 2008 with completions and deliveries until 2012 • Contracts secured in 2008 to-date worth $4.4 billion • Strategic alliance with Rio de Janeiro-based MacLaren shipyard to operate a shipyard in Brazil • Ship repair demand is exp
Slide 27: Environment
Environment Change 1H08 (%) Turnover ($M) 108.4 (7) EBITDA ($M) 4.3 (24) EBIT ($M) (1.2) (17) PATMI ($M) 4 (48) ROE* (%) 4 Solid Waste Treatment and • Continued focus on pre-disposal Resource Recovery Plant in Singapore treatment and waste-to-resource • Performance affected by start-up costs of soli
Slide 28: Environment: Key Developments
Environment Key Developments • Improvements being made to solid waste treatment and resource recovery plant in Singapore • Ongoing feasibility study on conversion of recovered resources to alternative fuel. Study to be completed by early 2009 • Australia joint venture continues to secure leading pos
Slide 29: Industrial Parks
Industrial Parks VSIP Change 1H08 Bac (%) Ninh VSIP 700ha Hai Phong Turnover ($M) 9.6 (41) 1,600ha EBITDA ($M) 2.9 (49) EBIT ($M) 2.2 (29) PATMI ($M) 13.9 (13) ROE* (%) 5 • Underlying operations remain healthy • Contributions affected by translation loss due to weakening USD and divestment of WGCM i
Slide 30: Industrial Parks: Key Developments
Industrial Parks Key Developments • 130 ha of industrial land in VSIP Bac Ninh committed, with profit to be booked over next 2 years • Broadening recurring income from new developments in WSIP: – To develop 80,000 m2 business park with Hong Kong listed company First Shanghai Ltd – Completed 110,000
Slide 31: Group Outlook
Group Outlook
Slide 32: Group Outlook
Group Outlook In FY2008, the Group aims to maintain its FY2007 PATMI before exceptional items and the one-off tax write-back barring unforeseen circumstances. However, the challenging global economic and financial environment creates uncertainty that may affect our forecast. 32
Slide 33: Positioned for the Future
Positioned for the Future • Leveraging capabilities in energy and water to seize growth opportunities • Exploring alternative fuels to enhance centralised utilities business • Establishing and growing beachheads in regional hubs • Strong balance sheet to seize opportunities for growth through M&A •
Slide 34: Vital Partners. Essential Solutions.
Vital Partners. Essential Solutions.
Slide 35: Disclaimer
Disclaimer This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. These forward-looking statements are based on current expectations, projections and assumptions about future events. Although Sembcorp Industries believes that these