Sembcorp Industries' earnings drop 7% to S$753m

Impairment losses hit $17m.

According to DBS, despite 10% growth in revenue, SCI’s net profit fell 7% y-o-y to S$753m in FY12 due to lower Marine margins, offset by strong Utilities. Excluding S$17m of impairment losses, Utilities core profits in 4Q12 was S$98.2m, ahead of the S$82m forecast.

This was despite maintenance shutdown of the Singapore cogen plant. Outperformance was led by additional gas sales. China also came in stronger, boosted by maiden contributions from AES power assets.

Here's more from DBS:

UK continued to see persistent weak power spreads. Non-Marine formed 56.6% of FY12 earnings.

Contribution from Singapore should ease this year as 30% more power supply is expected to spur decline in spark spreads, which was the biggest upside driver in

FY12. Additionally, gas sales could be pressured by new LNG supply coming onstream. China looks to be the key growth driver with full year contributions from AES power assets. We expect overall group earnings to be flat as stronger Marine offsets the slack at Utilities.

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