SEMBCORP Industries : U96 +0.36% posted a 56 per cent rise in net profit to S$608 million after exceptional items (EI) for the six months ended June, on a continuing operations basis.

 

Before EI, net profit for the half year rose 55 per cent to S$602 million from S$389 million during the same period the year before, based on the group&rsquo s financial results released on Friday (Aug 4).

 

Exceptional items comprised S$5 million in divestment gains from the sale of the group&rsquo s water businesses in Indonesia and S$1 million in negative goodwill from acquiring a 49 per cent joint venture in the solar business in Vietnam.

 

The increase in net profit was mainly due to growth in the conventional energy and renewables segments, Sembcorp said. It also recorded a 17 per cent drop in cost of sales to S$2.8 billion from S$3.4 billion, which more than offset a fall in revenue.

 

The results translate to earnings per share (EPS) of S$0.2971 for the half year, higher than the S$0.2748 recorded in the previous corresponding period. On a continuing operations basis, EPS was S$0.3408, an increase from S$0.2182 in H1 FY2022.

 

Revenue fell 6 per cent to S$3.7 billion from S$3.9 billion in the same period the previous year. The energy and urban solutions group attributed the lower revenue to the decrease in gas sales revenue in its conventional energy segment.

 

Net profit for its conventional energy segment rose 47 per cent to S$435 million as its Singapore co-generation power plants were able to &ldquo capture the value&rdquo in periods of high electricity prices by optimising generation assets and fuel sources, the group added.

 

With an increase in longer tenure power purchase agreements in Singapore, Sembcorp expects the conventional energy segment to provide stable earnings in the second half of the year.

 

For the renewables segment, net profit increased 55 per cent to S$118 million after EI on contributions from Sembcorp Huiyang New Energy and State Development Investment Corporate Group New Energy in China, as well as acquisitions completed in the first quarter of 2023.

 

&ldquo With 2.1 GW of renewables projects added in H1 2023, our gross renewables capacity has reached 11.9 GW, with 8.6 GW of capacity installed and 3.3 GW under development,&rdquo said Wong Kim Yin, group president and chief executive of Sembcorp.

 

Net profit for its integrated urban solutions segment, however, fell 15 per cent to S$53 million after EI, weighed down by lower land sales in Vietnam but alleviated by higher land sales in Indonesia. The group also had less contributions from its Singapore waste management business.

 

It will pay an interim dividend of S$0.05 per share on Aug 22, after record date on Aug 15.