Sembcorp Industries' net profit in the second half of 2024 as of the end of last year increased by 14% year-on-year to 471 million yuan. Given the company's strong performance, the board recommended a final dividend of 17 cents per share.

The company released its results before the market opening on Thursday (February 27), showing that net profit in the second half of 2024 was high, and its contribution mainly came from natural gas and related businesses and comprehensive urban solutions businesses.

Excluding special projects and cessation of operations, net profit rose 17% to 487 million yuan in the second half of the year.

Revenue fell by 5% to 3.2 billion yuan in the second half of the year, mainly due to major planned maintenance, reduced natural gas purchases, bearish prices in Singapore's natural gas and joint ventures, and a decline in UK electricity prices, and no major power shortages occurred. However, it is up to India and Vietnam to acquire, coupled with improved operating capacity, that renewable energy business has helped offset the impact of shrinking revenue.

As of the end of last year, net profit in the 2024 fiscal year increased by 7% year-on-year to 1 billion yuan, and revenue decreased by 9% to 6.4 billion yuan.

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Natural gas business is supported by acquisition contracts

Semco Industrial stated that the large-scale maintenance scheduled by Singapore's co-heating and wholesale electricity prices in Singapore fell by 34%, which did not affect its natural gas and related businesses. The statement said that 98% of the company's gas power generation business is supported by undertaking contracts, and 60% of the undertaking contracts signed at the end of last year were more than five years.

The board of directors recommends paying a final dividend of 17 cents per share, plus a 6 cents per share interim dividend in August last year, with a total dividend paid for the whole year of 23 cents per share. The stock's dividend yield was 3.9%, while the company's dividend yield was 40%, higher than 23% in fiscal 2023.

“The company achieved good results in fiscal 2024 thanks to strong profits and cash flow. The additional dividends reflect our confidence in the company's future performance and sustainable revenue,” said Huang Jinxian, CEO of Semco Industries, in a statement.

Looking ahead, the company will continue to follow China's economic and regulatory trends. In fiscal year 2024, the group faces power restrictions in China and reduced wind energy resources in India, affecting the performance of its renewable energy business.

Sembcorp Environment, a wholly-owned subsidiary announced for sale in November last year, is expected to be sold out in the first half of 2025, and is expected to bring no less than 100 million yuan in revenue to the company.