SembCorp Industries

(30-10-2016, 05:03 PM)BlueKelah Wrote: recent SOTP assessment by DBS on 28/9/2016 a month ago when share price around $2.50.

Sembcorp Industries buy TP $3.10 DBS

Not much change since then. Coal prices have gone through the roof recent quarters so india utilities might get hit in next few quarters. If Singapore goes into recession it might hit the utilities side as well. Sembcorp Marine will likely have to be CUT OFF or consolidated somewhere else to stem the bleeding.

SCI had already secured long term coal supply for TPCIL, 10mil tonnes over 10yrs signed in feb2012,  40mil tonnes over 20yrs signed in Jun2013. At time of announcing the partial acquisition of SGPL In feb2014, it also mentioned having been allocated local mining rights by the Indian authorities. I reckon substantial supply of its coal fuel should therefore be hedged.

Sembcorp forms first Solar Power Project in Singapore

Sembcorp Industries (Sembcorp) is pleased to announce its first solar energy project in Singapore, which will provide renewable power to two airfreight terminals near Singapore Changi Airport. This will be one of the largest single-location solar energy systems in the country.

Through wholly-owned subsidiary Sembcorp Utilities, Sembcorp has acquired 49% of Changi Mega Solar, which is developing a 3.6 megawatt grid-tied solar photovoltaic system on the rooftop of SATS Airfreight Terminals 5 and 6 near Singapore Changi Airport. This photovoltaic system will provide renewable power directly to SATS Airfreight Terminals 5 and 6. Currently under construction, the project is nearing completion and expected to start operating at the end of the year, subject to the relevant approvals from the authorities.

More details in http://infopub.sgx.com/FileOpen/Sembcorp...eID=430771

Strategic review? This new CEO was from Temasek. Will it be trying to do a couple of asset swaps within the Temasek group of companies (eg. with Keppel Corp)?

SEMBCORP 1Q2017 NET PROFIT GROWS 11% TO S$119.1 MILLION

1Q2017 Highlights
 Group net profit at S$119.1 million, up 11%
 Urban Development delivered a strong quarterly performance of S$37.2 million net profit

Neil McGregor, Group President & CEO of Sembcorp Industries, said, “Sembcorp delivered a reasonable set of first quarter results, underpinned by a good performance from our Urban
Development business. This underscores how our diversified portfolio of businesses gives us some strength and resilience as a Group. “As Sembcorp’s new Group President & CEO, I will be working closely with the board and management to stabilise and strengthen our position in our markets. Over the next few months, we will be undertaking a complete review of our businesses and strategic direction. As we position Sembcorp for the future, our focus will be on performance, sustainability and value creation. We face a challenging macro environment with rapidly changing market dynamics. This requires us to focus on cost discipline and strengthening operating performance. As we reshape Sembcorp, we will continue to build businesses that are durable and sustainable. I am confident that Sembcorp has a distinctive portfolio that will in time deliver long-term value growth for our shareholders.”

Just purely my personal opinion. This new guy from Temasek, taking over from veteran Tan KF, is not a young chap. That means he will not be helming SCI for too long. He is probably here for a specific task, restructing/strategic review, they are more or less the same, just different terms. So I am expecting some rather drastic changes, and not business as usual going forward. Once these objectives are achieved, someone younger will take over and take SCI over the next decade, just like Tan KF.

Interesting time to watch the development.

While SCI often claims that there is a large and growing demand for power in the India market, difficulties faced by SCI in securing long-term PPA for one of its India power plants seems to suggest otherwise. This article may shed some light on the industry.

India's Power Paradox
Improvements in efficiency and infrastructure are bringing electricity to the masses. That's not so great for energy companies.
By Nathaniel Bullard

In global energy markets, India takes third place in a few key metrics. The country has the world’s third-largest electricity generation system, after China and the United States. It is the world’s third-largest power generator, and it is also the world’s third-largest carbon dioxide emitter, again behind China and the U.S. in both measures. In one category, though, it comes in first: India has the world’s largest population without reliable access to electricity, about 250 million of its 1.3 billion people. Increased access to electricity is an infrastructure matter, but it is also a technological one -- and technology is both enabling electrification and blunting its growth at the same time.

https://www.bloomberg.com/view/articles/...er-paradox

Another issue maybe due to this -

http://www.businesstimes.com.sg/energy-c...oper-costs

(05-08-2017, 07:12 PM)choya Wrote: Another issue maybe due to this -

http://www.businesstimes.com.sg/energy-c...oper-costs

The BT article says, "Sembcorp Industries Ltd said recurring payment delays by Indian electricity retailers are piling on costs to operators and are bad for the renewable power business it wants to build."

But why are the electricity retailers delaying payment? Are they having cashflow issues? If so, why? Did SCI not claim that there is a lot of demand for electricity in India? Wouldn't business be brisk for electricity retailers?

The answer to these questions is perhaps because most of the consumers have been 'getting' electricity for free...

“Stealing power is considered a birthright by many, and anyone who tries to stop this is frowned upon,” said Padamjit Singh, a board member at Transparency International India and a member of the All India Power Engineers Federation, an industry advocacy group. “Power thefts are posing the biggest challenge to ensuring electricity access to all citizens, which is absolutely necessary for equitable growth of our country.”

https://www.bloomberg.com/news/articles/...ion-market

This helps us understand why SCI has been having difficulty in securing long-term PPAs with the local electricity retailers in India, over the past year.

More importantly, this highlights the importance of understanding the local condition in which your listed companies are operating in. I wonder if SCI was aware of this issue. Perhaps they were keeping their fingers crossed that the local authorities will stop electricity theft.

I saw powerless documentary show on TV few years ago.

AIT specification for one of it's park:
An on-site 20 MW power plant is the primary power source to ensure a high quality and reliable power supply within the park. 
The dedicated power plant operates in conjunction with the 220 kva state grid and in addition to the diesel generator (“DG”) sets,
thus providing a three-level power backup system ensuring the highest level of reliability for tenant operations.

Unfortunately, I lost my appetite due to currency fluctuation and high interest rate environment.

Watch Powerless (2014) and you'll definitely remember the challenges faced by Indian businesses and why AIT is doing very well.

Probably a partial exit from such CAPEX intensive biz isn't too far away and ain't too bad - (1) it reduces sovereign risks, and (2) frees up capital to re-capitalize their marine biz?

Sembcorp Industries to re-group energy businesses into single entity

SEMBCORP Industries has set out to consolidate its thermal and renewable energy businesses under a single entity.

The listed group said before Monday's trading hours that three transfers of shareholding interests in these businesses have taken place as part of the reorganisation of its India energy operations.

First, its wholly owned subsidiary, Sembcorp Utilities (SCU) has transferred its 88 per cent stake in Sembcorp Gayatri Power (SGPL) to Thermal Powertech Corporation India (TPCIL). TPCIL has also been renamed Sembcorp Energy India Limited (SEIL).

http://www.businesstimes.com.sg/companie...gle-entity

Sembcorp's India Power Plant Wins Tender to Supply 250MW Power to Bangladesh for 15 Years

Sembcorp Industries (Sembcorp) announced that itsSembcorp Gayatri Power Limited (SGPL) power plant in India has won a competitive tender conducted by the Bangladesh Power Development Board (BPDB) to supply 250 megawatts of power to Bangladesh over a total period of 15 years. SGPL has received letters of intent from the BPDB in this regard, and supply of power is expected to commence upon completion of procedural requirements and relevant government approvals.

SGPL is wholly owned by Sembcorp’s India power arm, Sembcorp Energy India Limited (SEIL). Vipul Tuli, Managing Director of SEIL, said, "We are pleased to have emerged as the successful bidder in this tender, and look forward to commence supply of power under a tariff that is competitive for Bangladesh and sustainable for our company. Our participation and success in this bid fits into SEIL’s strategy of providing cost-competitive and reliable power, while prudently contracting our balance open capacity at viable tariffs."

More details in http://infopub.sgx.com/FileOpen/SGPL%20W...eID=522215