Sembcorp (SGX:U96) reported 2H24 PATMI of S$471m, -13% h-o-h/+14% y-o-y. FY24 PATMI of S$1.011b grew 7% y-o-y and PATMI from continuing operations of S$1.02b was unchanged y-o-y.
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Sembcorp is now guiding for a 5% earnings CAGR for its gas business vs earlier guidance of a decline. We raise our FY25-26 earnings by 6-11% and maintain BUY. Our Sembcorp's target price rises from S$6.20 to S$7.10.
Earnings resilience from diverse revenue stream.
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Net profit from renewables business of S$183m was down 9% y-o-y. While the segment top line grew 6% from ~40% increase in installed capacity to 13.1GW, higher curtailment in China and lower wind speeds in India in the 2H24 affected the associates’ contribution and the bottom line.
Integrated urban solutions business grew top line by 3% and net profit by 40% due to higher land sales in Vietnam and Indonesia at the associates.
Debt metrics softened due to higher debt to fund M&As and grow operational power capacity.
Gas to grow: Long-term renewables target rises.
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Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
