Sembcorp Industries Ltd. · SGX:U96
Sembcorp Industries — H1 2001 Earnings Presentation
48 slides from Sembcorp Industries's earnings presentation, Aug 15, 2001
Slide 1: 2001 Interim Review
2001 Interim Review August 15, 2001
Slide 2: Highlights
HIGHLIGHTS • SembCorp Industries’ PATMI was $159m, up 1.3% against 1H00 (and exceeding 2000 total net earnings by 21%) • At half-year:- – net operating earnings rose 12% to $63m over 1H00 – PBT rose 17% over 1H00 to $263m – Utilities earnings grew 177% against 1H00 – Logistics posted 194% earnings g
Slide 3: Scope
SCOPE • Financial Review • Sectoral Review by Key Businesses • Group Review and Outlook 3
Slide 4: SembCorp Industries
SembCorp Industries Engineering & Environmental Marine In Utilities Logistics Construction Engineering Engineering Development - Singapore Food Industries - Singapore Mint - SembCorp Parks - Pacific Internet - SCS - Others 4
Slide 5: Financial Review
FINANCIAL REVIEW 5
Slide 6: Profit & Loss
PROFIT & LOSS $M 1H01 1H00 % Turnover 1,410.1 1,397.0 1 EBIT before exceptional items 150.3 147.0 2 Interest expense (51.7) (40.2) 29 Exceptional gain 121.1 103.3 17 Contribution from assocs/JVs 43.2 15.4 181 Profit before tax 262.9 225.5 17 Profit attributable to shareholders 159.1 157.1 1 Profit a
Slide 7: Contribution to Turnover
CONTRIBUTION TO TURNOVER $M 1H01 1H00 % Key Businesses Utilities 174.9 137.0 28 Engineering & Construction 275.6 307.7 (10) Environmental Engineering 74.5 4.5 NM Logistics 234.5 204.2 15 Marine Engineering 370.6 345.6 7 1,130.1 999.0 13 In Development & Corporate 280.0 398.0 (30) TOTAL 1,410.1 1,397
Slide 8: Contribution to Turnover (%) – by businesses
CONTRIBUTION TO TURNOVER (%) – by businesses In Devt. & Marine Marine Corporate In Devt. & Engrg Engrg Corporate 20 26 25 28 20 5 Enviro 15 E&C Engrg 17 22 Logistics 10 12 Logistics E&C Utilities Utilities 1H01 1H00 8
Slide 9: Contribution to Turnover - by geographical areas
CONTRIBUTION TO TURNOVER - by geographical areas 1H01 ($M) % 1H00 ($M) % in % Singapore 795.9 56 816.6 58 (3) Overseas 614.2 44 580.4 42 6 TOTAL 1,410.1 100 1,397.0 100 1 9
Slide 10: Contribution to PBT
CONTRIBUTION TO PBT $M 1H01 1H00 % Key Businesses Utilities 17.4 7.8 124 Engineering & Construction 14.2 23.1 (38) Environmental Engineering 4.6 - NM Logistics 107.3 30.1 256 Marine Engineering 48.0 52.3 (8) 191.5 113.3 69 In Development 22.3 37.4 (40) Corporate 49.1 74.8 (34) TOTAL 262.9 225.5 17 1
Slide 11: Contribution to PBT (%) – by businesses
CONTRIBUTION TO PBT (%) – by businesses Marine In Devt. & Engrg Corporate Marine In Devt. & Engrg Corporate 27 18 Enviro 23 50 2 Engrg 5 14 E&C Logistics 7 41 3 Utilities 10 Utilities Logistics E&C 1H01 1H00 11
Slide 12: Exceptional Items
EXCEPTIONAL ITEMS 1H01 ($M) Gross SCI’s share (after tax) Gain arising from dilution of 60.0 60.0 our interest in SembLog Gain on sale on SembLog’s marine services business 28.2 12.0 Gain on disposal of SembLog’s equity in assoc company 22.9 14.2 Others 10.0 10.0 Total 121.1 96.2 12
Slide 13: Contribution to PATMI
CONTRIBUTION TO PATMI $M 1H01 1H00 % Key Businesses Utilities 11.3 4.0 177 Engineering & Construction 10.0 16.6 (39) Environmental Engineering 3.5 - NM Logistics 46.9 16.0 194 Marine Engineering 23.6 24.4 (3) 95.3 61.0 56 In Development & Corporate 63.8 96.1 (34) TOTAL 159.1 157.1 1 13
Slide 14: Contribution to PATMI (%) – by businesses
CONTRIBUTION TO PATMI (%) – by businesses Marine Marine In Devt. & Engrg In Devt. & Engrg Corporate 15 Enviro Corporate 15 Engrg 61 40 2 Logistics 10 3 Utilities 30 11 E&C 6 Logistics 7 E&C Utilities 1H01 1H00 14
Slide 15: Financial Indicators
FINANCIAL INDICATORS 1H01 1H00 % 2000 ROE* (%) 23.6 17.7 33 13.2 ROTA* (%) 7.0 6.4 9 4.8 EPS (cts) 9.91 9.81 1 8.10 Interest Cover (times) 6.5 7.8 (17) 5.2 WACC (%) 8.2 9.1 (10) 9.0 EVA ($m) (23.9) (26.1) 8 (10.9) CAPEX ($m) 158.7 87.0 82 1,219.0 * annualized 15
Slide 16: Financial Indicators
FINANCIAL INDICATORS Jun 30, 2001 Dec 31, 2000 % NTA per share ($) 0.56 0.51 10 Net Gearing (times) 1.2 1.1 9 Net Gearing (excluding PF) 0.9 0.9 - * PF - Project Financing 16
Slide 17: Financial Indicators (without Exceptional Items)
FINANCIAL INDICATORS (without Exceptional Items) 1H01 1H00 % 2000 ROE* (%) 14.1 9.7 45 13.2 ROTA* (%) 5.0 4.5 11 4.8 Interest Cover (times) 4.2 5.2 (19) 5.2 * annualized 17
Slide 18: ROE of Key Businesses
ROE OF KEY BUSINESSES 1H01* (%) Utilities 10.2 Engineering & Construction 24.6 Environmental Engineering 4.3 Logistics 71.9 Marine Engineering 8.8 * annualized 18
Slide 19: Balance Sheet
BALANCE SHEET As Restated $M Jun 30, 2001 Dec 31, 2000 % Non-current assets 3,567.0 2,963.1 20 Current assets 2,468.4 2,582.1 (4) Less: Current liabilities (2,818.2) (3,185.0) (11) 3,217.2 2,360.2 36 Term loan (1,390.4) (858.4) 62 Non-current liabilities (174.6) (167.7) 4 1,652.2 1,334.1 24 Share ca
Slide 20: External Borrowings
EXTERNAL BORROWINGS * Currencies Amount ($M) Total S$M As a % ST LT Equivalent of total S$ 609 1,322 1,931 82 US$ 269 118 387 16 Others (RM, A$, £) 37 16 53 2 Total 915 1,456 2,371 100 (Average interest rates for S$ and US$ were 4.58% and 5.89% p.a. respectively.) * excluding SembCap 20
Slide 21: Net Borrowings
NET BORROWINGS * $M As at As at Jun 30, 2001 Dec 31, 2000 % Short-term 915 1,260 (38) Long-term 1,456 918 37 Gross 2,371 2,178 8 Less Cash (399) (741) (86) Net 1,972 1,437 27 * excluding SembCap 21
Slide 22: Cash Flow Statement
CASH FLOW STATEMENT 1H01 ($M) Cash flow from: Operating activities (39) Investing activities 81 Financing activities (317) Net increase in cash & cash equivalents (275) Cash & cash equivalents at start of year 658 Cash & cash equivalents at June 30 383 22
Slide 23: Capex – 1H01
CAPEX – 1H01 $M Major investment items: Simon-Carves 32 SembCorp Cogen 11 PPL Shipyard 16 SembCorp Logistics (Australia) & Goodpack 10 Major fixed asset items: Plant & Machinery 36 Marine vessels 23 Buildings 10 23
Slide 24: Goodwill & Amortization
GOODWILL & AMORTIZATION $M Goodwill Amortization Charge Acquisition of:- Simon-Carves 32.3 0.1 SembCorp Cogen 2.8 0.1 SembCorp Logistics (Australia) 3.2 - Additional shares in JPL Industries 0.7 0.2 39.0 0.4 24
Slide 25: Solitaire Update
SOLITAIRE UPDATE • Hearing to resume in November 2001 on termination issue • Award expected to be issued on 2002 • Subsequent hearings expected on alternative grounds of termination by Owners or on quantum of damages 25
Slide 26: Sectoral Review
SECTORAL REVIEW 26
Slide 27: Utilities
UTILITIES $M 1H01 1H00 % Turnover 174.9 137.0 28 PATMI 11.3 4.0 177 Contribution: Turnover Oil & Gas 85.8 75.8 13 Centralised Utilities 73.6 56.3 31 Chemical Feedstock 4.8 4.9 - Utilities head office & others 10.7 - NM PATMI Oil & Gas 5.0 1.3 285 Centralised Utilities 8.4 2.9 190 Chemical Feedstock
Slide 28: Utilities
UTILITIES • Earnings increased 177% against 1H00 • We now have 33 customers on Jurong Island and 30 gas reticulation offtakers • SembCorp Power has 40 power supply customers and more than 200MW secured • Key economic factors affecting Utilities are:- – positive growth of the specialty chemicals indu
Slide 29: Utilities
UTILITIES Outlook: • Utilities contribution for 2001 to grow almost two- times its 2000 earnings • On track to meet its 2002 earnings targets • SembCogen to commence full operations in 3Q01 • Preparation underway for Genco bid, expected early 2002 • Preparing to bid for Singapore’s first 30 mgd desa
Slide 30: Engineering & Construction
ENGINEERING & CONSTRUCTION 1H01 1H00 % Turnover ($M) 275.6 307.7 (10) PATMI ($M) 10.0 16.6 (39) Turnover mix Singapore 86% 90% Overseas 14% 10% Projects on hand at Aug 1($bn) 1.4 NA (including fee-based contracts) Book to bill 1.6 1.3 30
Slide 31: Engineering & Construction
ENGINEERING & CONSTRUCTION • Order Book composition:- Major Projects $m (value) Client (Singapore) – Tuas View 198 JTC Reclamation – LRT Punggol / SengKang 186 LTA – Kranji Tunnel 70 ENV – Marina Line 39 LTA – Jurong Sewage Treatment 34 PUB 31
Slide 32: Engineering & Construction
ENGINEERING & CONSTRUCTION • Order Book composition:- Major Projects $m (value) Client (Overseas) – Alkyd Resin/ 49 Continental Latex Plant Specialties (Guangzhou) – LDPP Plant 45 Pemex (Mexico) – GE Medical Plant 44 GE (Beijing) – Peciko 3rd Train Gas 34 TOTAL Treatment Plant (Indonesia) 32
Slide 33: Engineering & Construction
ENGINEERING & CONSTRUCTION • Turnover and profits affected by economic slowdown and poor construction market • No negative impact from a strengthening US$ - billings in US$ or S$. No significant exposure to other currencies Simon-Carves integration: • Finance, marketing, QA/safety and IT systems sub
Slide 34: Engineering & Construction
ENGINEERING & CONSTRUCTION Prospects for FY01: • Full-year net earnings will be approximately 50% of 2000 • Limited benefits from Singapore’s Off-Budget infrastructure development because of keen competition from local construction companies • E&C projects on hand and order book growth signal better
Slide 35: Environmental Engineering
ENVIRONMENTAL ENGINEERING $M 1H01 1H00 % Turnover 74.5 4.5 NM PATMI 3.5 - NM • Profit contribution from Semac and SembSita (Australia) showed growth • Market leader in Singapore - 55% of municipal waste (about 2000 tonnes/day) • Material recovery will be a future source of revenue • Unaffected by po
Slide 36: Environmental Engineering
ENVIRONMENTAL ENGINEERING • Streamlining at Semac:- – reduced vehicles from 240 to 140 – reduced depots from 5 to 2 – cut workforce by about 25% – expected savings of around $4m for 2001 Outlook: • Earnings expect to improve over 2000 • Studying Material Recovery facilities (in operation around 2002
Slide 37: Logistics
LOGISTICS $M 1H01 1H00 % Turnover 237.6 212.1 12 PATMI 76.4 21.5 255 Contribution:- Turnover Supply Chain 176.1 148.9 18 Offshore Logistics 28.3 23.9 18 Marine Services 33.2 39.3 (16) PATMI Supply Chain 10.3 8.4 23 Offshore Logistics 7.4 7.3 1 Marine Services 8.8 10.4 (15) KNI 11.4 - NM Others/Corpo
Slide 38: Logistics
LOGISTICS • New customers from joint marketing with KNI - secured 4 contracts:- – Conoco in Singapore and Australia – Grundfos in China – Tata-Honeywell in India • Economic factors:- – global economic slowdown pushes companies to outsource more logistics functions – strong outlook for Logistics in C
Slide 39: Logistics
LOGISTICS Outlook: • Singapore: good baseload from long-term contracts, steady growth in SCM • China: operating margins to improve as network expansion will be completed by end-2001 • India: double-digit sales growth but modest profits due to start-up costs • New revenue streams from:- – geographica
Slide 40: Marine Engineering
MARINE ENGINEERING $M 1H01 1H00 % • Turnover 373.4 349.0 7.0 • PATMI 39.2 41.9 (6.4) • Turnover contribution by businesses (%):- shiprepair – 63 48 offshore / ship conversion – 12 33 shipbuilding – 17 8 others – 8 11 40
Slide 41: Marine Engineering
MARINE ENGINEERING • Strong order book of $1.72bn for shipbuilding, offshore and ship conversion • Economic factors:- – number of vessels coming in for repairs expected to increase due to lower utilization – oil price of around US$25bbl Brent Crude benefits ship conversion, offshore builds and oil &
Slide 42: Marine Engineering
MARINE ENGINEERING Outlook: • Full-year earnings target to match last year • Marine order book now at $1.72bn with $400m in shiprepair realizable in 2001 42
Slide 43: Group Review and Outlook
GROUP REVIEW AND OUTLOOK 43
Slide 44: Group Review and Outlook
GROUP REVIEW AND OUTLOOK • SembCorp Industries’ profitability was healthy despite uncertain economic conditions • Our countercyclical businesses, particularly Utilities, provide sustainable and reliable earnings • E&C weak but with strong project growth • Logistics has posted strong growth with its
Slide 45: Group Review and Outlook
GROUP REVIEW AND OUTLOOK Economic factors: • China’s entry into WTO is positive for Asia and for us • Vietnam’s trade pact with US is also a positive factor • Indonesia’s new government is committed to business and economic recovery. Potentially positive • Singapore’s economy remains weak but the ef
Slide 46: Outlook
OUTLOOK • Utilities is set to increase its earnings by almost two-fold • Logistics targets operating earnings growth of about 25% for this year • EE will show profit growth over 2000 • E&C profits to be about half that of 2000 • Marine earnings expected to match 2000 46
Slide 47: Outlook
OUTLOOK • Group CAPEX for 2001 is expected to be around $500m • No fund raising this year - next year only if we get a sizeable project • SembCorp Industries on track to meet its management target for 2001 47
Slide 48: SembCorp Industries
SembCorp Industries 48