Sembcorp Industries Ltd – FY 2010 Annual Report

This post is on the financial results of Sembcorp Industries Limited for the year ended 31 December 2010.

Net Profit $792.9 million (up 16%)
ROE   22.2%
EPS     44.4 cents
Total dividend per share 17.0 cents (38.3% of EPS)
Dividend yield 3.30% (based on 31 December 2010 share price of $5.14)
Net Assets per share $2.13
Cash and cash equivalent $3.5 billion

Sembcorp has three key business segments: Marine, Utilities, and Industrial Parks & Integrated Townships. Biggest operations come from Marine business segment (ship repair, shipbuilding, ship conversion, rig building and offshore engineering and construction) followed by Utilities business segment (energy and water).

Sembcorp Industries owns 60.9 per cent of Sembcorp Marine Ltd, another listed company on the Singapore Exchange. Any gains from Sembcorp Marine will accrue to Sembcorp Industries, albeit at only 60.9 per cent.

The order book for Marine business segment stands at $4.8 billion with completions and deliveries stretching to 2013.

Net profit after tax grew 16 per cent to reach $792.9 million. Dividend yield is 3.30 per cent based on 31 December 2010 share price. Total shareholder return is 43 per cent taking into consideration changes in share prices over the year and dividend proposed for the year. This outperforms the Straits Times Index appreciation of 13 per cent.

“Although global recovery has improved in the past months, recent events in the Middle East and North Africa may create uncertainties in the world economy which may have an impact on businesses.” (source: Marine Review, AR 2010) There was no mention of the impact of Japan earthquake/tsunami and nuclear crisis in the report as this report was written before the earthquake. It remains to be seen as to how this will affect Sembcorp Industries’ future operation.

Copyright © 2011, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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