Sembcorp Industries' growth outlook dims as domestic power business loses spark

It's pinning its hopes on overseas growth.

Sembcorp Industries' short-term growth outlook has dimmed due to headwinds in its Singapore power business.

According to OCBC, Sembcorp Industries pinning its hopes on overseas markets as its domestic power operations are impacted by capacity expansion in the industry.

“In total, Singapore utilities accounted for about half of total utilities in FY14, and the rest from overseas assets. We still expect steady growth from the overseas business,” said OCBC.

Despite recent headwinds, OCBC believes that the group’s long-term growth story remains intact.

“Though SCI is currently facing headwinds, we remain sanguine about longer term prospects, given the pipeline of projects in developing countries where utilities demand is expected to grow. We believe SCI’s proven track record in identifying, securing, financing and executing projects puts it in good stead for more to come,” the report said.