Sembcorp RE Acquisition In China, India Rose By 42% YoY In 2023

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Singapore-based Sembcorp Industries (Sembcorp) recently posted a strong performance for the year of 2023 (FY2023). They recently announced that they made a turnover of S$7.0 billion compared to S$7.8 billion in FY2022.

Sembcorp said, “The group net profit before exceptional items (EI) grew 38% year-on-year to S$1.0 billion from S$739 million in FY2022, with higher contributions from the Gas and Related Services and Renewables segments. Group net profit after EI and loss from discontinued operation was S$942 million, 11% higher than S$848 million in FY2022. The better performance was mainly driven by higher power prices in Singapore.”

The company said, “During the year, we successfully secured multiple long-term power purchase agreements (PPAs) for our Singapore generation assets, ensuring a strong and stable stream of operating cash flow and earnings certainty for the segment. Net profit before EI for the Renewables segment grew 42% to S$200 million, from S$141 million in FY2022, driven by contributions from acquisitions in China and India, as well as higher contributions from energy storage and solar operations in Singapore.”

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They added, “Since end-2022, we have secured 4.0GW of gross renewables capacity through acquisitions and organic growth across key markets, bringing the Group’s renewables capacity to 13.8GW1. Net profit before EI from the integrated urban solutions segment was S$121 million compared to S$150 million in FY2022, mainly due to lower commercial and residential land sales in the Vietnam urban business and the cessation of a public cleaning contract in the waste business.”

Wong Kim Yin, Group President and Chief Executive Officer (CEO) of Sembcorp Industries said, “2023 was marked by strong growth momentum in the renewables business. The signing of multiple long-term PPAs creates strong recurring income for our gas and related services business, providing earnings certainty to fund our renewables growth. We are encouraged by our strong performance in 2023 and will focus on the execution of our 2024 – 2028 strategy. The Group is well-positioned to navigate the path of energy transition and grow its renewables portfolio. It will continue to focus on the execution of its 2024 – 2028 strategy to transform its portfolio from brown to green.”

Group Outlook 

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The group estimated, “The renewables segment is expected to perform well as more greenfield projects are commissioned and brownfield acquisitions are completed progressively, in the year. The Group performed well in 2023, underpinned by the strong contribution of the gas and related services segment, on the back of better performance in the Singapore power market and earnings growth in the renewables segment.  The Group is well-positioned to navigate the path of energy transition and grow its renewables portfolio. It will continue to focus on the execution of its 2024 – 2028 strategy to transform its portfolio from brown to green.”