Sembcorp Industries Ltd. · SGX:U96
Sembcorp Industries — FY1998 Earnings Presentation
37 slides from Sembcorp Industries's earnings presentation, 1999
Slide 1: Performance Review 1998
SembCorp Industries PERFORMANCE REVIEW 1998
Slide 2: FY98 PATMI growth and recommended dividend
SembCorp Industries’ PATMI for FY98 showed 1 per cent growth to $92.9m. The Directors recommend a 10 per cent dividend amounting to $29.2m to shareholders. 2 2
Slide 3: Scope
SCOPE • Financial Performance • Post-merger Initiatives • Business Review • Outlook and Prospects 3 3
Slide 4: Financial Performance
FINANCIAL PERFORMANCE 4 4
Slide 5: Profit & Loss
PROFIT & LOSS $M 1998 1997 % Turnover 3,900.1 3,309.3 18 PBT (before Assocs & JVs) 185.0 123.0 50 Contribution from Assocs 17.2 75.3 (77) Contribution from JVs 11.0 4.7 134 PBT (after Assocs & JVs) 213.2 203.0 5 PATMI (before EI) 92.9 92.3 1 EI (458.0) (38.0) NM PATMI (after EI) (365.1) 54.3 NM 5 5
Slide 6: Balance Sheet Items
BALANCE SHEET ITEMS $M 1998 1997 % Share Capital 394.5 394.5 - Capital Reserves 564.7 646.5 (13) Revenue Reserves (154.4) 242.9 NM Currency Translation Reserves 2.3 7.8 (71) Share Capital & Reserves 807.1 1,291.7 (37) Minority Interests 790.4 827.4 (4) Interest of Preference Shareholders 350.0 350.0
Slide 7: Contribution to Turnover by business sectors
CONTRIBUTION TO TURNOVER (%) (by business sectors) Corporate Others Leisure & Others Corporate Lifestyle 2 Leisure & 2 15 Lifestyle 15 44 13 53 14 IT IT 16 24 Infrastructure Marine Infrastructure Engrg Marine Engrg 1998 1997
Slide 8: Contribution to PATMI by business sectors
CONTRIBUTION TO PATMI (by business sectors) $M 1998 1997 % Infrastructure Engineering & Construction 29.3 16.8 74 Integrated Logistics 28.3 26.3 8 Building Materials 2.9 2.9 - Industrial Parks 5.6 5.3 6 Others (Cathay, SembCorp Energy) (3.6) 4.4 NM Marine Engineering 41.8 8.3 NM Information Technolo
Slide 9: Contribution to PATMI by business sectors
CONTRIBUTION TO PATMI (by business sectors) $M 1998 1997 % Lifestyle Food Processing & Distribution 16.2 12.1 34 Food Retailing 5.3 1.4 278 Travel & Retail 1.9 (2.4) NM Others (Minting, Hotels & Resorts) 0.4 6.6 (94) Corporate (50.6) (36.2) (40) Others (2.0) 40.5 NM (Properties, Financial services)
Slide 10: Contribution to PBT by country of incorporation
CONTRIBUTION TO PBT (by country of incorporation) 1998 % 1997 % Singapore 225.4 105.7 199.3 98.2 Rest of Asia (13.3) (6.2) 5.4 2.7 Others 1.1 0.5 (1.8) (0.9) TOTAL 213.2 100 203.0 100 10 10
Slide 11: Extraordinary Items 1H98
EXTRAORDINARY ITEMS Write-downs and disposals: $M 1H98 Property Development (9.0) Financial Services 0.8 Hotels & Resorts (56.9) Other Investments 73.4 Sub-total 8.3 11 11
Slide 12: Extraordinary Items 2H98
EXTRAORDINARY ITEMS Write-downs and disposals: $M 2H98 Non-core Businesses Property Development (197.8) Financial Services (30.0) Hotels & Resorts (53.1) Ferries & Cruises (15.2) Shipping (32.5) Other Investments (123.4) Sub-total (452.0) Core Businesses (14.3) Sub-total (466.8) Grand Total for FY19
Slide 13: Financial Indicators
FINANCIAL INDICATORS 1998 1997 % ROE (%) 8.60 6.48 33 EPS (cents) 5.72 5.69 1 NTA per share ($) 0.50 0.81 (38) ROTA (%) 3.7 3.0 23 Net Gearing (times) 0.93 0.86 8 CAPEX ($m) 297 1129 (74) 13 13
Slide 14: Capex
CAPEX $M Top three investment items • Delifrance (general offer) 48 • BOO Projects 35 • CSN & GEIS 13 Top three fixed asset items • SML vessels 45 • Propylene Purification Unit 22 • Marine Engineering (dock in Karimun, plant & machinery) 18 14 14
Slide 15: External Borrowings (excluding SembCap)
EXTERNAL BORROWINGS (excluding SembCap) Currencies Amount ($M) Total S$M As a % ST LT Equivalent of total S$ 707 1,083 1,790 86 US$ 197 61 258 13 Others (RM, £) 19 4 23 1 Total 923 1,148 2,071 100 (Average interest rates for S$ and US$ were 6.15 per cent and 5.92 per cent p.a. respectively). 15 15
Slide 16: Post-Merger Initiatives
POST-MERGER INITIATIVES 16 16
Slide 17: Rationalisation of Businesses
RATIONALISATION OF BUSINESSES • Reorganisation of construction and engineering businesses into SembCorp Construction and SembCorp Engineering. • Merger of ST Logistics and SML to form SembCorp Logistics. • Placement of all five industrial parks under one management. • Consolidation of hotels and res
Slide 18: Business Review
BUSINESS REVIEW 18 18
Slide 19: Infrastructure: Engineering & Construction
INFRASTRUCTURE Engineering & Construction • SembCorp Engineering’s PATMI grew 50 per cent to $18.3m due to higher profit margins and cost control. • SembCorp Construction’s PATMI rose 25 per cent to $14.4m. • Secured 11 off-take agreements for 15 years for SUT. • Won $204.5m LTA contract to build Ch
Slide 20: Infrastructure: Integrated Logistics
INFRASTRUCTURE Integrated Logistics • Merger of logistics units to form one of Asia’s largest integrated logistics providers. • ST Logistics reported PATMI growth of 30 per cent to $12.6m. • SML’s PATMI fell 16 per cent to $20.5m due to losses incurred in ferries & cruises business. • Won contract t
Slide 21: Infrastructure: Utilities & Power
INFRASTRUCTURE Utilities & Power • Signed agreement for 22-year supply of natural gas from West Natuna. • Construction of SembCorp Cogen’s 800MW power plant to begin in 2Q99. 21 21
Slide 22: Infrastructure: Industrial Parks
INFRASTRUCTURE Industrial Parks • Performance affected by regional crisis, political uncertainty in Indonesia and Japan’s economic recession. • PATMI contribution to SembCorp Industries: 1998 1997 BIP $12.4m $10.6m BIE ($0.7m) ($0.6m) WSIP ($5.3m) ($3.1m) VSIP ($0.2m) $0.6m KMIC ($0.6m) ($2.2m) TOTA
Slide 23: Marine Engineering
MARINE ENGINEERING • PATMI contribution grew significantly due to full year consolidation of JSL’s financial results. • JSL’s PATMI increased 58 per cent to $71.3m due to: – strengthening of US dollar. – increased baseload from shipbuilding and offshore activities. – improved profitability of associ
Slide 24: Information Technology: ST Computer
INFORMATION TECHNOLOGY ST Computer • PATMI fell 27 per cent to $10.2m due to adoption of a more conservative provision policy. • Formed regional JV with GE Information Systems. • Secured a two-year contract to manage Compaq’s data centre operations. 24 24
Slide 25: Information Technology: PacNet
INFORMATION TECHNOLOGY PacNet • Turned in PATMI of $15.1m due to 110 per cent increase in subscriber base to about 204,000. • Raised US$35.7m from its Nasdaq listing in Feb. SembCorp Industries received US$13.8m from sale of vendor shares. • As at Mar 26, PacNet’s market capitalisation was about US$
Slide 26: Lifestyle: Food Processing & Distribution
LIFESTYLE Food Processing & Distribution • SFI posted PATMI of $16.2m, representing a growth of 33 per cent over the previous year. • Introduced higher value added products and made significant market penetration in UK and Europe through ICL, its UK subsidiary. • Manages 49 SAF cookhouses and has re
Slide 27: Lifestyle: Food Retailing & Others
LIFESTYLE Food Retailing & Others • Delifrance’s full-year PATMI (Jan-Dec 98) fell 30 per cent to $6.9m compared to $10.0m in FY97 due to current economic crunch and intense retail competition. • Full year reporting for Delifrance changed to follow calendar year. • Despite poor retail market, SAFE E
Slide 28: Y2K Compliance
Y2K COMPLIANCE • Y2K efforts are in progress to ensure that all computer systems are Y2K compliant by 2Q99. • Success of Y2K programme also depends on the success of Y2K programmes of business partners and associates. • Business contingency plans are in place to minimise impact, if any, on operation
Slide 29: Outlook and Prospects
OUTLOOK AND PROSPECTS 29 29
Slide 30: Solitaire: History
SOLITAIRE History In Nov 93, Sembawang was awarded a contract worth $230m by Allseas for conversion works to the vessel “Solitaire”. Allseas terminated the contract in Oct 95 before works were fully completed. Arbitration started in London in early 1996. 30 30
Slide 31: Solitaire: The Claims
SOLITAIRE The Claims Allseas • Termination on the grounds of: – failure to complete on time – breaches of contractual obligations • Damages claimed include: – costs relating to termination and removal of vessel – costs of completion of the vessel Sembawang • Counter-claim for wrongful termination •
Slide 32: Solitaire: Status
SOLITAIRE Status • Hearing to consider termination issue took place in Sept 98. • No award has been issued so far but tribunal decision is believed to be imminent. • Our chances of winning are 50:50. • Should the decision be adverse, we will make a provision in FY98 to cover our possible net exposur
Slide 33: Outlook & Prospects: Infrastructure
OUTLOOK & PROSPECTS Infrastructure • Engineering and construction order book now stands at $1.8bn. • SUT’s earnings are targeted to increase 30 per cent over the next three years due to new projects and increased number of customers. • SembCorp Logistics’ earnings are targeted to grow by 10 per cent
Slide 34: Outlook & Prospects: Marine Engineering and IT
OUTLOOK & PROSPECTS Marine Engineering • Offshore construction, conversion and repair activities expected to be strong for 1999 due to baseload of projects. Information Technology • ST Computer will pursue internationalisation efforts into greater China, Australia and the US and expand e-commerce an
Slide 35: Outlook & Prospects: IT and Food Processing
OUTLOOK & PROSPECTS Information Technology • PacNet will expand within its existing markets in Hong Kong and the Philippines. It will also penetrate into selected new markets such as Australia, China and India to achieve regional market leadership. • PacNet will build up its expertise through strate
Slide 36: Priorities for 1999
PRIORITIES FOR 1999 • Streamline operations and reduce costs by $35m. • Orderly exit from non-core businesses. • Implement EVA throughout SembCorp Industries to rate business and CEO performance. • Focus each SBU on its core businesses. • Explore fund-raising options. • Attain management target for
Slide 37: mao,
a. om © OC mao, = uv Y) + a. a i SEL ay ff 7 mnt Industries | , EB ELE al