Sembcorp Indus Ord Stock Earnings Reports

Sembcorp Industries delivered resilient FY2025 results despite material headwinds across Singapore (lower spark spreads from increased supply), the U.K. (weaker demand/prices) and China renewables (higher curtailment and policy/tax changes). Group highlights: revenue $5.8bn, adjusted EBITDA ~$2.0bn, underlying net profit ~$1.0bn (6-2-1), underlying EPS $0.564 and ROE ~18.2%. The Board proposed a final dividend that brings FY2025 total to $0.25 (up $0.02 or ~9% YoY) and management signalled intent to steadily increase payout to narrow the gap with peers. Key operational points: Gas & Related Services remains the earnings anchor (Singapore portfolio plus Senoko Energy), with ~80% of Sembcorp’s portfolio contracted for 5+ years (Senoko has shorter-term contracts and heavy recontracting in 2026); a 600 MW hydrogen-ready H‑class plant will commission in Q4 2026 and is expected to improve fleet efficiency; Renewables grew capacity (now 20.4 GW total, 5.4 GW secured/under construction) but China curtailment and a VAT refund policy change will weigh near-term renewables earnings (~$12m headwind in 2026 and ~$30m curtailment impact in 2025); IUS delivered stable net profit with higher recurring income from ready-built factories and higher occupancy. Cash flow and balance sheet: strong operating cash generation (~$1.2bn EBITDA cash flow; free cash flow ~ $1.7bn ex SembWaste proceeds), net debt ~ $7.8bn, on-demand liquidity ~$3.6bn and net debt/EBITDA ~3.9x. Alinta (Australia) acquisition remains the primary growth priority (expected to complete in H1 2026); completion will incur one-off transaction costs (~AUD208m, mostly stamp duties) and is expected to meaningfully increase scale and recurring cash flow. 2026 outlook: management expects near-term headwinds (recontracting at lower spark spreads, China curtailment persistence, UK weakness) but believes operational synergies, the new H‑class plant, the Alinta acquisition and growth in India/Middle East/Australia will support returns and dividend growth over time.