SembCorp Industries

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#1
Sembcorp Industries is a leading energy, water and marine group. A trusted provider of essential energy and water solutions to both industrial and municipal customers, Sembcorp is also a world leader in marine and offshore engineering. In addition, it is an established developer of integrated industrial townships in Asia and a provider of environmental solutions. (Company's website)

The share price took a big fall today to close at $5.01. Certainly a well diversified company with plenty of investments in utilities and the O&G industry. The utilities business doesn't seem to attract much interest as compared to its O&G business (through its stake in Semb Marine and Cosco). I guess this is due to the long gestation period before those assets generate positive cash-flow.

Its FY result due on Feb 25 will be eagerly awaited.

Is anyone a shareholder here ?

(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#1
Sembcorp Industries is a leading energy, water and marine group. A trusted provider of essential energy and water solutions to both industrial and municipal customers, Sembcorp is also a world leader in marine and offshore engineering. In addition, it is an established developer of integrated industrial townships in Asia and a provider of environmental solutions. (Company's website)

The share price took a big fall today to close at $5.01. Certainly a well diversified company with plenty of investments in utilities and the O&G industry. The utilities business doesn't seem to attract much interest as compared to its O&G business (through its stake in Semb Marine and Cosco). I guess this is due to the long gestation period before those assets generate positive cash-flow.

Its FY result due on Feb 25 will be eagerly awaited.

Is anyone a shareholder here ?

(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#2
I recently swapped out from SMM to SCI, mainly due to the overwhelming bullishness of the investment community on the O&M industry and on rig-builders especially. Once investor's expectations are priced in, there would be little upside and a greater potential for disappointment.

you are right that its stake in SMM seems to be the main factor driving its share price. basically, i am viewing SCI as similar in nature to SMM, but with a lower volatility to oil prices and the world economy.
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#2
I recently swapped out from SMM to SCI, mainly due to the overwhelming bullishness of the investment community on the O&M industry and on rig-builders especially. Once investor's expectations are priced in, there would be little upside and a greater potential for disappointment.

you are right that its stake in SMM seems to be the main factor driving its share price. basically, i am viewing SCI as similar in nature to SMM, but with a lower volatility to oil prices and the world economy.
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#3
Agree with Yaosheng.

Seems most people (and analyst) treat SCI as SMM parent company and value it based on SMM outlook. Not much analysis on its utilities division. Don't think many analyst cover it either.

I think this will change in the next 2-3 years when their multi-billion utilities investments starts to generate significant cash-flow.

Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#3
Agree with Yaosheng.

Seems most people (and analyst) treat SCI as SMM parent company and value it based on SMM outlook. Not much analysis on its utilities division. Don't think many analyst cover it either.

I think this will change in the next 2-3 years when their multi-billion utilities investments starts to generate significant cash-flow.

Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#4
Possibly SCI coming into its own. The marine business is some 60% and sitting on cash. On the other hand, the energy and water business are exciting business areas of today; sitting on debt.

Long lists of analysts supposely covering the company on its website, but no reports there. Share price fluctuates a lot, probably because of challenges in valueing the business. I have been happy holding it and seen long term improvement over the years.
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#4
Possibly SCI coming into its own. The marine business is some 60% and sitting on cash. On the other hand, the energy and water business are exciting business areas of today; sitting on debt.

Long lists of analysts supposely covering the company on its website, but no reports there. Share price fluctuates a lot, probably because of challenges in valueing the business. I have been happy holding it and seen long term improvement over the years.
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#5
SEMBCORP COMPLETES ACQUISITION OF 49% STAKE IN THERMAL POWERTECH CORPORATION INDIA

http://info.sgx.com/webcoranncatth.nsf/V...penelement

Semb Corp previously announced that it will invest $293 million for a 49% stake in the JV company which in turn will invest $1.9 billion to build and operate a 1,320 MW power plant. The plant will be completed in 2H 2013 and fully operational in 2014.

SCI has been investing heavily in its utilities division over the past 2 years. These investments will contribute greatly to its bottom-line once operational in the coming 2-3 years.

(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#5
SEMBCORP COMPLETES ACQUISITION OF 49% STAKE IN THERMAL POWERTECH CORPORATION INDIA

http://info.sgx.com/webcoranncatth.nsf/V...penelement

Semb Corp previously announced that it will invest $293 million for a 49% stake in the JV company which in turn will invest $1.9 billion to build and operate a 1,320 MW power plant. The plant will be completed in 2H 2013 and fully operational in 2014.

SCI has been investing heavily in its utilities division over the past 2 years. These investments will contribute greatly to its bottom-line once operational in the coming 2-3 years.

(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#6
Hi all,

Sembcorp Indy recently announced its new $121m contract in its untilities division as well. I decided to accumulate sembcorp indy due to its strong management team and long term economic potential. People will still need to use water and energy even if the macro economic factors are weighing down and their focus is very much on recurring income. Also, i calculated that it is worth much more than its current market price now with more than 35% margin of safety! Will definitely appreciate your opinions!

(Vested)
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#6
Hi all,

Sembcorp Indy recently announced its new $121m contract in its untilities division as well. I decided to accumulate sembcorp indy due to its strong management team and long term economic potential. People will still need to use water and energy even if the macro economic factors are weighing down and their focus is very much on recurring income. Also, i calculated that it is worth much more than its current market price now with more than 35% margin of safety! Will definitely appreciate your opinions!

(Vested)
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#7
Why don't you share your calculations with all of us?

I own one stingy lot as well, safely stowed inside my CPF account, bought when I just started investing and didn't pay much attention to analysing blue chips which I thought will always be safe. Needless to say, I am still in red! That's one of the many lessons for me. That said, I still don't spend time analysing this now haha :p

(27-07-2011, 09:34 AM)secretinvestors Wrote: Hi all,

Sembcorp Indy recently announced its new $121m contract in its untilities division as well. I decided to accumulate sembcorp indy due to its strong management team and long term economic potential. People will still need to use water and energy even if the macro economic factors are weighing down and their focus is very much on recurring income. Also, i calculated that it is worth much more than its current market price now with more than 35% margin of safety! Will definitely appreciate your opinions!

(Vested)

Reply
#7
Why don't you share your calculations with all of us?

I own one stingy lot as well, safely stowed inside my CPF account, bought when I just started investing and didn't pay much attention to analysing blue chips which I thought will always be safe. Needless to say, I am still in red! That's one of the many lessons for me. That said, I still don't spend time analysing this now haha :p

(27-07-2011, 09:34 AM)secretinvestors Wrote: Hi all,

Sembcorp Indy recently announced its new $121m contract in its untilities division as well. I decided to accumulate sembcorp indy due to its strong management team and long term economic potential. People will still need to use water and energy even if the macro economic factors are weighing down and their focus is very much on recurring income. Also, i calculated that it is worth much more than its current market price now with more than 35% margin of safety! Will definitely appreciate your opinions!

(Vested)

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#8
(27-07-2011, 10:16 AM)Blackjack Wrote: Why don't you share your calculations with all of us?

I own one stingy lot as well, safely stowed inside my CPF account, bought when I just started investing and didn't pay much attention to analysing blue chips which I thought will always be safe. Needless to say, I am still in red! That's one of the many lessons for me. That said, I still don't spend time analysing this now haha :p

(27-07-2011, 09:34 AM)secretinvestors Wrote: Hi all,

Sembcorp Indy recently announced its new $121m contract in its untilities division as well. I decided to accumulate sembcorp indy due to its strong management team and long term economic potential. People will still need to use water and energy even if the macro economic factors are weighing down and their focus is very much on recurring income. Also, i calculated that it is worth much more than its current market price now with more than 35% margin of safety! Will definitely appreciate your opinions!
(Vested)
I estimated an intrinsic value by discounting future cash flows to the present. Sembcorp indy is an industrial conglomerate with a global presence and i personally feel the management takes a sustainable approach towards expansion that will positively impact its long term economic fundamentals. Please do check out its annual reports and website under 'our businesses' for more details. Its utilities (Energy, Water etc) businesses provides good recurring income even in times of poor economic situations. Its move towards the industrial park business is strategic as well because it can also integrate their utilities supply into the industrial park. Its 5 year average ROE and ROA is about 20% and 9% respectively. With a competent and relatively experienced management team, long term economic potential and margin of safety, i see little reason not to purchase the stock even at current market prices where it had moved up quite a fair bit since early '09. I purchased this stock solely for capital appreciation (its dividend yield is pretty average i would say) Smile Will definitely appreciate any comments!

(Vested)
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#8
(27-07-2011, 10:16 AM)Blackjack Wrote: Why don't you share your calculations with all of us?

I own one stingy lot as well, safely stowed inside my CPF account, bought when I just started investing and didn't pay much attention to analysing blue chips which I thought will always be safe. Needless to say, I am still in red! That's one of the many lessons for me. That said, I still don't spend time analysing this now haha :p

(27-07-2011, 09:34 AM)secretinvestors Wrote: Hi all,

Sembcorp Indy recently announced its new $121m contract in its untilities division as well. I decided to accumulate sembcorp indy due to its strong management team and long term economic potential. People will still need to use water and energy even if the macro economic factors are weighing down and their focus is very much on recurring income. Also, i calculated that it is worth much more than its current market price now with more than 35% margin of safety! Will definitely appreciate your opinions!
(Vested)
I estimated an intrinsic value by discounting future cash flows to the present. Sembcorp indy is an industrial conglomerate with a global presence and i personally feel the management takes a sustainable approach towards expansion that will positively impact its long term economic fundamentals. Please do check out its annual reports and website under 'our businesses' for more details. Its utilities (Energy, Water etc) businesses provides good recurring income even in times of poor economic situations. Its move towards the industrial park business is strategic as well because it can also integrate their utilities supply into the industrial park. Its 5 year average ROE and ROA is about 20% and 9% respectively. With a competent and relatively experienced management team, long term economic potential and margin of safety, i see little reason not to purchase the stock even at current market prices where it had moved up quite a fair bit since early '09. I purchased this stock solely for capital appreciation (its dividend yield is pretty average i would say) Smile Will definitely appreciate any comments!

(Vested)
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#9
Tongue

source: shippingonline.cn

[Image: ejalocation1.JPG]

Sembcorp: Strategic Foothold in Brazil


Sembcorp Marine wishes to announce that its wholly-owned subsidiary Jurong Shipyard (JSPL) will be building a new shipyard in Brazil to cater directly to one of the fastest growing offshore oil and gas exploration and production markets in the world. A freehold land area of 825,000 sqm (approximately 1.7 times larger than the land size of Jurong Shipyard’s Tanjong Kling location) with 1.6 km of coastline in the State of Espirito Santo in Brazil has been acquired and will be developed as a shipyard. Located in the Municipal of Aracruz, the site is about 80 km by road north of Vitoria, the capital of Espirito Santo State which is the 2nd largest producer of oil in Brazil. The site is strategically located close to the offshore Espirito Santo Basin, which is one of the recently discovered giant pre-salt oil basins of Brazil, making it an ideal location to support the country’s oil and gas activities.


The investment in the new shipyard is in line with Sembcorp Marine’s global hub strategy and it reinforces the Group’s commitment to forging a strategic foothold in Brazil to grow its offshore oil and gas businesses. Mr Wong Weng Sun, President and CEO of Sembcorp Marine said “We have been a key player in Brazil’s oil and gas construction industry since 1997, having delivered to-date a total of 11 units of oil and gas exploration, production and storage platforms for Brazilian oilfields. These platforms produce more than half of Petrobras’ daily 2 million barrels of oil output, thus effectively making JSPL the main contractor to Petrobras. In addition to these production units, JSPL’s turnkey 6th generation ultra-deepwater semisubmersible rigs, the West Taurus, Ocean Courage and West Orion, are chartered to Petrobras for deployment in Brazil and the Gulf of Mexico.


With our track record and experience operating in Brazil, we are confident that the new shipyard will be well-positioned to meet the needs of the vibrant market for drilling rigs construction, FPSO integration, topsides modules fabrication, ship and rig repairs. The shipyard will also provide plentiful employment and training opportunities for the local workforce in Espirito Santo.”


----Ownership Structure


Sembcorp Marine through Jurong Shipyard will own 100% of Jurong Netherlands B.V, a company incorporated in the Netherlands. The company will in turn fully own a locally incorporated Brazilian company, Estaleiro Jurong Aracruz Ltda (EJA) which will own the shipyard. Jurong do Brasil Prestacao de Services Ltda, another company incorporated in Brazil and owned by Jurong Netherlands B.V, will undertake marine and offshore services in Brazil.


----Development Plans


Engineering design for the new shipyard has commenced, with development and construction works to be undertaken in stages. On completion, the shipyard will be equipped with state-of-the-art facilities, including a drydock, slipways, berthing quays and ancillary steel and piping facilities. It will be capable of drillships construction, building of semi-submersible rigs, undertaking FPSO integration, fabrication of topside modules and PSVs construction, in addition to the traditional activities of drilling rig repairs, ship repairs and modification works. Details of the shipyard and the capex plans will be announced separately at an appropriate time.


----Financial Impact


Sembcorp Marine expects positive contributions to its earnings from the new shipyard in Brazil in the future. However, the above is not expected to have a material impact on Sembcorp Marine’s earnings and net tangible assets per share for the current financial year ending 31 December 2010.
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#9
Tongue

source: shippingonline.cn

[Image: ejalocation1.JPG]

Sembcorp: Strategic Foothold in Brazil


Sembcorp Marine wishes to announce that its wholly-owned subsidiary Jurong Shipyard (JSPL) will be building a new shipyard in Brazil to cater directly to one of the fastest growing offshore oil and gas exploration and production markets in the world. A freehold land area of 825,000 sqm (approximately 1.7 times larger than the land size of Jurong Shipyard’s Tanjong Kling location) with 1.6 km of coastline in the State of Espirito Santo in Brazil has been acquired and will be developed as a shipyard. Located in the Municipal of Aracruz, the site is about 80 km by road north of Vitoria, the capital of Espirito Santo State which is the 2nd largest producer of oil in Brazil. The site is strategically located close to the offshore Espirito Santo Basin, which is one of the recently discovered giant pre-salt oil basins of Brazil, making it an ideal location to support the country’s oil and gas activities.


The investment in the new shipyard is in line with Sembcorp Marine’s global hub strategy and it reinforces the Group’s commitment to forging a strategic foothold in Brazil to grow its offshore oil and gas businesses. Mr Wong Weng Sun, President and CEO of Sembcorp Marine said “We have been a key player in Brazil’s oil and gas construction industry since 1997, having delivered to-date a total of 11 units of oil and gas exploration, production and storage platforms for Brazilian oilfields. These platforms produce more than half of Petrobras’ daily 2 million barrels of oil output, thus effectively making JSPL the main contractor to Petrobras. In addition to these production units, JSPL’s turnkey 6th generation ultra-deepwater semisubmersible rigs, the West Taurus, Ocean Courage and West Orion, are chartered to Petrobras for deployment in Brazil and the Gulf of Mexico.


With our track record and experience operating in Brazil, we are confident that the new shipyard will be well-positioned to meet the needs of the vibrant market for drilling rigs construction, FPSO integration, topsides modules fabrication, ship and rig repairs. The shipyard will also provide plentiful employment and training opportunities for the local workforce in Espirito Santo.”


----Ownership Structure


Sembcorp Marine through Jurong Shipyard will own 100% of Jurong Netherlands B.V, a company incorporated in the Netherlands. The company will in turn fully own a locally incorporated Brazilian company, Estaleiro Jurong Aracruz Ltda (EJA) which will own the shipyard. Jurong do Brasil Prestacao de Services Ltda, another company incorporated in Brazil and owned by Jurong Netherlands B.V, will undertake marine and offshore services in Brazil.


----Development Plans


Engineering design for the new shipyard has commenced, with development and construction works to be undertaken in stages. On completion, the shipyard will be equipped with state-of-the-art facilities, including a drydock, slipways, berthing quays and ancillary steel and piping facilities. It will be capable of drillships construction, building of semi-submersible rigs, undertaking FPSO integration, fabrication of topside modules and PSVs construction, in addition to the traditional activities of drilling rig repairs, ship repairs and modification works. Details of the shipyard and the capex plans will be announced separately at an appropriate time.


----Financial Impact


Sembcorp Marine expects positive contributions to its earnings from the new shipyard in Brazil in the future. However, the above is not expected to have a material impact on Sembcorp Marine’s earnings and net tangible assets per share for the current financial year ending 31 December 2010.
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#10
Business Times - 28 Feb 2012

Utilities power profit at Sembcorp in 2011


Group sees 10% rise in Q4 net gain to $251.9m, dividend of 17 cents declared

By LYNN KAN

SEMBCORP Industries's fourth-quarter net profit rose 10 per cent year-on-year to $251.9 million from $228.7 million, helped by better operating performance from its utilities business.

Revenue for the multinational utilities and marine group in the three months ended Dec 31, 2011 was $2.25 billion, up 8.6 per cent from $2.07 billion a year earlier.

Sembcorp also boasted full-year profits of $809.3 million, up 2.1 per cent from $792.9 million, the latter including an exceptional item of $32 million.

Turnover for FY2011 improved 3.2 per cent to $9.05 billion from $8.76 billion in the previous year.

Earnings per share for the fourth quarter and full-year stood at 14.12 cents and 45.32 cents, respectively.

Sembcorp's star performer in the past year was its utilities business, which topped previous profit records. The segment's profits of $304.3 million - making up 37 per cent of group profit - surged by one-third over FY2010's $231.2 million.

Profit at its utilities business in Singapore, China and the Middle East leapt over the year 24 per cent, 57 per cent and 31 per cent, respectively, from the year before.

In Singapore, Sembcorp sewed up $1.6 billion of new and renewed contracts for gas supply, of which $410 million were secured in the fourth quarter alone. Sembcorp said its Chinese operations secured and renewed contracts worth $63 million over the year.

And in the coming year, Sembcorp's utilities business will get a boost from earnings contributions from new projects.

For instance, its US$1 billion Salalah Independent Water and Power Plant in Oman is 90 per cent complete, and will start to add to Sembcorp's recurring earnings in the second quarter of 2012.

Sembcorp's Jurong Island developments in industrial wastewater treatment plant also start contributions in the third quarter of 2012, it said.

Sembcorp is bullish on its utilities business for 2012, despite the cogeneration plant in Singapore undertaking a planned major maintenance during the year, which usually takes about 40-50 days.

Sembcorp also laid on the table its 'Vision 2015'. Its target is to grow its power generation capacity from 5,600 megawatts today to 10,000 megawatts, and water treatment capacity from 7 million cubic metres a day to 10 million cubic metres a day.

It will do so by entering the 'right markets to capitalise on growth opportunities', relying on certain 'beachheads' in regions to deepen Sembcorp's presence.

For instance, it intends to pursue more power and water projects in Chile, where it owns municipal water and wastewater treatment plants.

Full-year net profit at Sembcorp's marine division however fell 7 per cent to $456.2 million from $492.8 million last year. That was expected as Sembcorp Marine, the rigbuilder which Sembcorp Industries owns over 60 per cent of, announced a decline in bottom line due to fewer semi-submersible and jack-up rig projects.

Profits at Sembcorp's integrated urban development division however edged up 5 per cent for the full year to $38.7 million from $36.9 million previously because of higher land sales recognised.

Sembcorp announced a final tax exempt tier-one dividend of 17 cents per ordinary share, which is made up of an ordinary dividend of 15 cents and a bonus dividend of 2 cents.

The counter fell 3 cents to end at $5.14 yesterday.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#10
Business Times - 28 Feb 2012

Utilities power profit at Sembcorp in 2011


Group sees 10% rise in Q4 net gain to $251.9m, dividend of 17 cents declared

By LYNN KAN

SEMBCORP Industries's fourth-quarter net profit rose 10 per cent year-on-year to $251.9 million from $228.7 million, helped by better operating performance from its utilities business.

Revenue for the multinational utilities and marine group in the three months ended Dec 31, 2011 was $2.25 billion, up 8.6 per cent from $2.07 billion a year earlier.

Sembcorp also boasted full-year profits of $809.3 million, up 2.1 per cent from $792.9 million, the latter including an exceptional item of $32 million.

Turnover for FY2011 improved 3.2 per cent to $9.05 billion from $8.76 billion in the previous year.

Earnings per share for the fourth quarter and full-year stood at 14.12 cents and 45.32 cents, respectively.

Sembcorp's star performer in the past year was its utilities business, which topped previous profit records. The segment's profits of $304.3 million - making up 37 per cent of group profit - surged by one-third over FY2010's $231.2 million.

Profit at its utilities business in Singapore, China and the Middle East leapt over the year 24 per cent, 57 per cent and 31 per cent, respectively, from the year before.

In Singapore, Sembcorp sewed up $1.6 billion of new and renewed contracts for gas supply, of which $410 million were secured in the fourth quarter alone. Sembcorp said its Chinese operations secured and renewed contracts worth $63 million over the year.

And in the coming year, Sembcorp's utilities business will get a boost from earnings contributions from new projects.

For instance, its US$1 billion Salalah Independent Water and Power Plant in Oman is 90 per cent complete, and will start to add to Sembcorp's recurring earnings in the second quarter of 2012.

Sembcorp's Jurong Island developments in industrial wastewater treatment plant also start contributions in the third quarter of 2012, it said.

Sembcorp is bullish on its utilities business for 2012, despite the cogeneration plant in Singapore undertaking a planned major maintenance during the year, which usually takes about 40-50 days.

Sembcorp also laid on the table its 'Vision 2015'. Its target is to grow its power generation capacity from 5,600 megawatts today to 10,000 megawatts, and water treatment capacity from 7 million cubic metres a day to 10 million cubic metres a day.

It will do so by entering the 'right markets to capitalise on growth opportunities', relying on certain 'beachheads' in regions to deepen Sembcorp's presence.

For instance, it intends to pursue more power and water projects in Chile, where it owns municipal water and wastewater treatment plants.

Full-year net profit at Sembcorp's marine division however fell 7 per cent to $456.2 million from $492.8 million last year. That was expected as Sembcorp Marine, the rigbuilder which Sembcorp Industries owns over 60 per cent of, announced a decline in bottom line due to fewer semi-submersible and jack-up rig projects.

Profits at Sembcorp's integrated urban development division however edged up 5 per cent for the full year to $38.7 million from $36.9 million previously because of higher land sales recognised.

Sembcorp announced a final tax exempt tier-one dividend of 17 cents per ordinary share, which is made up of an ordinary dividend of 15 cents and a bonus dividend of 2 cents.

The counter fell 3 cents to end at $5.14 yesterday.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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