Sembcorp Industries Ltd. · SGX:U96
Sembcorp Industries — FY2006 Earnings Presentation
36 slides from Sembcorp Industries's earnings presentation, Feb 16, 2007
Slide 1: FY2006 Results Announcement
FY2006 Results Announcement February 16, 2007 1
Slide 2: Scope of Presentation
Scope of Presentation 1. CEO’s Report 2. Financial Review 3. Operations Review 4. Group Outlook
Slide 3: CEO's Report
CEO’s Report Tang Kin Fei Group President & CEO
Slide 4: FY2006 Performance Round-Up
FY2006 Performance Round-Up Record Group PATMI hitting $1.03bn, up 240% Strong earnings growth from continuing operations • Turnover of $7.5bn, up 30% • PATMI before EI of $371.9M, up 52% Healthy balance sheet • Net gearing at 0.04x • Interest cover at 13 times Return On Equity increased to 18% Econ
Slide 5: SembCorp's 2006 Scorecard
SembCorp’s 2006 Scorecard SembCorp Transformed Successfully divested SembLog and SembE&C and streamlined the Group’s focus on Utilities and Marine & Offshore Engineering businesses Listing of Riau island investments through Gallant Venture Full and final settlement of Solitaire arbitration 5
Slide 6: SembCorp's 2006 Scorecard
SembCorp’s 2006 Scorecard Milestones for Future Growth UTILITIES Singapore: Maintained 100% success rate in securing new customers on Jurong Island UK: Secured contracts to supply utilities to SABIC’s new worldscale 400,000 tpa LDPE plant on Wilton International China: All multi-customer beachheads
Slide 7: Sustainable Earnings & Growth
Sustainable Earnings & Growth ($M) 01 02 03 04 05 06 PATMI before EI 149 161 184 228 278 380 EI 25 11 101 163 25 650 2006 PATMI before EI 36% 1,030 5-Year CAGR PATMI before EI 391 21% 285 303 Return on equity before 174 172 EI 18% 01 02 03 04 05 06 7
Slide 8: Financial Review
Financial Review Lim Joke Mui Group CFO
Slide 9: Group Profit & Loss
Group Profit & Loss ($M) FY06 FY05 ∆% CONTINUING OPERATIONS Turnover 7,486 5,771 30 EBITDA 675 524 29 EBIT 511 362 41 PBT 614 387 59 PATMI 372 245 52 EPS (cents) 21.1 13.9 53 DISCONTINUED OPERATIONS1 Turnover 621 1,638 (62) PATMI 8 33 (77) GROUP Turnover 8,107 7,409 9 PATMI before EI 380 278 36 EI 6
Slide 10: Group Turnover
Group Turnover ($M) FY06 FY05 ∆% CONTINUING OPERATIONS Utilities* 3,590 3,262 10 Marine 3,539 2,102 68 Enviro 210 217 (3) Others/Corporate 147 190 (23) 7,486 5,771 30 DISCONTINUED OPERATIONS Logistics1 133 542 (75) Engineering & Construction2 488 1,096 (56) TOTAL 8,107 7,409 9 *Note: Utilities (excl
Slide 11: Turnover by Geographical Areas (%)
Turnover by Geographical Areas* (%) Continuing Operations ($M) FY06 FY05 ∆% FY06 Group Turnover Singapore 3,439 2,699 27 6% Europe 2,727 2,003 36 12% Rest of Asia 900 698 29 Others 420 371 13 $7.5bn 46% 36% 6% 12% $5.8bn 47% 35% 54% of Group Turnover from overseas FY05 Group Turnover * Based on geog
Slide 12: Group PATMI
Group PATMI ($M) FY06 FY05 ∆% CONTINUING OPERATIONS Utilities 223.7 147.2 52 Marine 128.6 73.3 76 Enviro (18.4) 4.7 NM Others/Corporate 38.1 19.9 92 371.9 245.1 52 DISCONTINUED OPERATIONS Logistics1 7.9 32.7 (76) Engineering & Construction2 (0.3) 0.7 NM 7.6 33.4 (77) GROUP PATMI before EI 379.6 278.
Slide 13: Exceptional Items
Exceptional Items ($M) FY06 Gain/(Loss) on disposal of Investments 473.2 - Logistics 463.3 - Pulau Holdings (Nirwana Gardens) 14.0 - E&C (24.1) - Cosco Corp 12.6 - Others 7.4 Additional charge arising from final settlement of Solitaire (57.0) Tax benefit arising from utilisation of Solitaire tax los
Slide 14: Group Capex
Group Capex ($M) FY06 Fixed Asset Items 428.7 - Utilities 297.8 - Marine 90.8 - Enviro 23.1 - Others 17.0 Equity Investments 161.1 - Cosco Corporation (S) Ltd 120.3 - Cosco Shipyard Group 8.7 - SembCorp Chunxing Alloy Group 26.9 - Others 5.2 TOTAL 589.8 14
Slide 15: Group Cash Flow
Group Cash Flow ($M) FY06 FY05 CASH FLOW FROM OPERATING ACTIVITIES - before changes in working capital 724 575 - changes in working capital (80) 318 - payment for Solitaire settlement (683) - - tax paid (47) (45) (86) 848 CASH FLOW FROM INVESTING ACTIVITIES - divestment proceeds & sale of FA 876 256
Slide 16: Group Borrowings
Group Borrowings ($M) Dec 31, 06 Dec 31, 05 PF loans 538 399 Long-term 622 546 Short-term 163 161 Gross 1,323 1,106 Less: Cash and FD (1,186) (1,231) Net Debt / (Cash) 137 (125) Net Gearing Ratio 0.04 Net Cash Exclude PF* Net Cash (238) (394) Net Gearing Ratio Net Cash Net Cash * PF – Non-recourse p
Slide 17: Financial Indicators
Financial Indicators FY06 FY05 Before EI EPS (cents) 21.6 15.7 ROE (%) 18.2 14.2 ROTA (%) 7.8 5.7 Interest Cover (times) 13 11 After EI EPS (cents) 58.5 17.1 ROE (%) 42.8 15.3 ROTA (%) 16.4 6.1 Interest Cover (times) 22 12 Other Indicators EVA ($M) 924.7 251.0 NAV per share ($) 1.59 1.14 17
Slide 18: Delivering Shareholder Returns
Delivering Shareholder Returns DIVIDENDS AND CAPITAL REDUCTION (S’pore cts/share) 01 02 03 04 05 06 Ordinary Dividends 3.00 3.00 5.00 5.00 6.50 12.90 Special Dividends - 1.50 2.00 6.25 - 16.00 Payout from Capital Reduction - - - - 11.70 15.00 Net Profit from Operations Dividend Payout Ratio (%) 24 3
Slide 19: Operations Review
Operations Review Tang Kin Fei Group President & CEO
Slide 20: Utilities
Utilities FY06 Turnover ($M) 3,628.8 (11%) EBITDA ($M) 383.5 (23%) EBIT ($M) 292.7 (31%) PATMI ($M) 223.7 (43%) ROE (%) 27 • Continued growth and high returns • Strong performance from UK and Vietnam operations 20
Slide 21: Utilities Revenue & PATMI
Utilities Revenue & PATMI ($M) FY06 FY05 ∆% REVENUE - Centralised Utilities 1,112.2 996.1 12 - Energy 2,351.9 1,966.9 20 - Offshore Engineering* 164.7 317.5 (48) Total Revenue 3,628.8 3,280.5 11 PATMI - Centralised Utilities 138.7 107.7 29 - Energy 57.5 73.4 (22) - Offshore Engineering 22.4 (23.2) N
Slide 22: Centralised Utilities and Energy
Centralised Utilities and Energy Revenue ($M) FY05 FY06 PATMI ($M) FY05 FY06 Singapore 2,269.7 2,670.9 Singapore 115.3 99.7 Overseas 693.3 793.3 Overseas 65.8 96.5 Gain on sale of inv’t 8.9 - TOTAL 2,963.0 3,464.2 TOTAL 190.0 196.2 Gain on sale 4% Overseas 23% Overseas Overseas Overseas 35% 49% 23%
Slide 23: Utilities Global Footprint
Utilities Global Footprint UK China • SembCorp Utilities • Shanghai Caojing Cogen UK • Nanjing SembCorp SUIWU Europe • Nanjing SembCorp Water • Nanjing SembCorp Utilities • Zhangjiagang SembCorp Water China • Qianan SembCorp Cogen UAE GCC Vietnam • Emirates • Phu My 3 BOT Power Co. SembCorp Water &
Slide 24: Utilities Singapore
Utilities Singapore KEY DEVELOPMENTS • Secured contracts worth $68.0M/year Jurong Island • Added new capacity added to cater to growing customer demand – 5,000m3/day effluent recovery plant – 5,000m3/day HGIW plant – 1,300m3/day high COD wastewater treatment plant by 1Q07 – 400tph VHP boiler by 2Q08
Slide 25: Utilities UK
Utilities UK KEY DEVELOPMENTS • Secured new and renewed contracts worth $166.5M (mostly 1-5 years), including 15-year utilities and services contract with SABIC LDPE plant (formerly Huntsman facility) Teesside Developments GROWTH PROSPECTS • Organic growth in the UK – Five-year asset protection cont
Slide 26: Utilities China
Utilities China KEY DEVELOPMENTS • Zhangjiagang WWTP Phase I completed – Capacity increased from 10,000 tpd to 20,000 tpd – Selected as showcase facility for high concentration wastewater treatment by the Jiangsu provincial government • Completion of 3,000 tpd pre-treatment facility in Nanjing • NCI
Slide 27: Utilities Middle East
Utilities Middle East United Arab Emirates KEY DEVELOPMENTS Concluded acquisition of 40% an independent water and power plant in Fujairah (Fujairah 1) in UAE GROWTH PROSPECTS Proposed Existing Federal Fujairah 1 Fujairah-2 Electricity & • Fujairah-2 IWPP Project Water Authority – Bidding for greenfi
Slide 28: Utilities Vietnam
Utilities Vietnam GROWTH PROSPECTS • Proposed new 700 MW power plant – Signed MOU with the People’s Committee of Ho Chi Minh City Dept of Planning & Investment in May 2006 to explore feasibility of a 700 MW power plant project Vietnam – Signed land-leasing MOU with Tan Thuan Industrial Promotion Co.
Slide 29: Marine
Marine FY06 Turnover ($M) 3,545.0 (67%) EBITDA ($M) 273.8 (68%) EBIT ($M) 225.6 (81%) PATMI ($M) 238.4 (96%) ROE (%) 20 • An outstanding year with solid growth • Total dividend for FY2006 at 15.0 cents per share, an increase of 64% • ROE at record 20% Note: Figures taken at SembCorp Marine Group lev
Slide 30: Marine in 2006
Marine in 2006 KEY DEVELOPMENTS • Strong net orderbook at $7.1bn (as at Feb 15, 07) with completion and deliveries till 2010 • New contracts secured in FY2007 to-date stand at $1.7bn • Completed and delivered in FY2006 – 5 shipbuilding projects – 6 ship conversion projects – 2 jack-up rigs – 1 semi-
Slide 31: Enviro
Enviro FY06 Turnover ($M) 211.9 (3%) EBITDA ($M) (21.7) NM EBIT ($M) (28.1) NM PATMI ($M) (16.8) NM ROE (%) (13) • Focused on waste-to-resource and pre-disposal treatment • Impairment provision of $21M for Singapore municipal waste collection business in 3Q2006
Slide 32: Enviro in 2006
Enviro in 2006 KEY DEVELOPMENTS • Entry into waste-to-resource – Used Lead Acid Batteries (ULAB) in China: through 50:50 partnership with Chunxing Alloy Group – Waste plastics recycling in Singapore: through 90% stake in SembEnviro KK Asia • Commenced construction of 800 tpd pre-disposal treatment f
Slide 33: Group Outlook
Group Outlook
Slide 34: 2007 Outlook
2007 Outlook UTILITIES • Singapore operations expected to perform better in 2007 • UK operations expected to continue performing well, underpinned by favourable supply contracts secured until end-2007 / 1Q2008. 30- megawatt biomass power plant Wilton 10 scheduled to come onstream in 2H2007 • Vietnam
Slide 35: 2007 Outlook
2007 Outlook MARINE • 2007 expected to be better year than 2006 based on the schedule of completion of projects ENVIRO • Pre-disposal treatment facility in Singapore scheduled to commence operations in 2H2007 • Australia operations are expected to be stable and show modest growth • Continued focus o
Slide 36: Disclaimer
Disclaimer This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. These forward-looking statements are based on current expectations, projections and assumptions about future events. Although SembCorp Industries believes that these