Sembcorp Industries' share price flat after its Q2 profit rose by 20% on reduced costs
The group posted a 29% fall in revenue at S$2.37 billion for the quarter but a steeper fall in cost of sales – at 33% - helped prop up its bottom line to rise by 20%.
Sembcorp Industries posted a 20% increase in net profit for the second quarter, at S$98 million, up from S$82 million a year ago as a fall in costs outweighed the slower sales.
Following the post-market announcement, the group’s shares were flat on Thursday morning, down 0.88% or S$0.02, at S$2.24. Year-to-date, Sembcorp Industries’ shares have fallen by 11%, from S$2.51 on January 2, 2019.
Sembcorp Industries reported an earnings per share of 4.98 Singapore cents for the quarter, a 26% rise from the preceding period.
An interim dividend of two Singapore cents per share, to be paid on September 4, 2019, has been declared.
The group posted a 29% fall in revenue at S$2.37 billion for the quarter but a steeper fall in cost of sales – at 33% - helped prop up its bottom line to rise by 20%.
For the half-year period, the group posted a net profit of S$191 million, a 20% increase from S$159 million a year ago. Meanwhile, revenue fell by 21% to S$4.85 billion.
‘This performance was underpinned by our energy business. We continue to make progress in our strategy to reposition the business to become a more sustainable integrated energy player in the global energy transition. Our focus remains on lifting performance, building capabilities and sharpening our competitive edge,’ commented Sembcorp Industries’ group president and chief executive officer Neil McGregor.
While there are downside risks to global economic growth expectations with heightened policy uncertainty and trade tensions, the group's diversified business portfolio is expected to provide resilience to weather the prevailing macroeconomic uncertainties, Sembcorp Industries said in its earnings statement.
Sembcorp Marine to report full-year losses
Sembcorp Industries noted that the market environment continues to be “challenging” for the offshore and marine sector and its subsidiary Sembcorp Marine will be expecting full-year losses.
In June, Sembcorp Industries said it is extending a S$2 billion subordinated loan facility to Sembcorp Marine to strengthen its financial position amid the downturn in the global offshore and marine industry. The move is a lifeline to the shipbuilder as the industry continues to struggle.
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