- We expect Sembcorp to raise its payout to shareholders through higher dividends and a planned monetisation of its India renewables.
- Sembcorp's 1H25 revenue and adjusted PATMI were below expectations at 42%/43%. Gas earnings disappointed due to one-off gas curtailment earnings in the prior year, renewal of 2022/23 contracts at lower spreads, and higher cost Malaysian imported energy. The volatile quality of gas earnings was evident despite proclamations of long-term contracts.
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- Renewables in India were the growth engine with earnings rising 22% to S$138mil. The 33% jump in attributable capacity and the strong wind factor were the key drivers. A jump in curtailment rates in China to 12.9% (1H24: 8.2%) offset renewables growth.
The Positive
Earnings growth in renewables.
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50% jump in dividends.
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