Thursday, 7 August 2014

Sembcorp Industries

UOBKayhian on 7 Aug 2014

2Q14’s utilities net profit declined by 17% yoy as Singapore utilities earnings fell by 33%
on lower spark spread on the back of intense competition. Notwithstanding this, SCI is
powering ahead with large power projects – especially in India – which will come onstream
in 2014-16. An interim DPS of 5 S cents has been declared. We cut our 2014-16
earnings forecasts by 7%, but maintain BUY. Target price: S$5.95.

Powering ahead. SCI will continue to power ahead with 3,000MW (+76%) of power and
close to 1.5m m3/day (+21%) of water and wastewater treatment capacities which will
come on-stream in 2014-16. The largest capacity additions are two power plants –
totaling 2,640MW – in India. SCI’s Banyan Cogen (Singapore) is completed and in
operation. TPCIL (India)’s first 660MW unit is currently pre-commissioning with
commercial operations expected end-14. NCCPP (India) is 46% complete while
Fujairah 1 desalination expansion (UAE) is 57% complete.

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