Sembcorp Industries Ltd
(STU:SBOA)
€
3.823
-0.062 (-1.6%)
Market Cap: 6.89 Bil
Enterprise Value: 12.86 Bil
PE Ratio: 10.52
PB Ratio: 1.85
GF Score: 77/100 
Half Year 2026 Sembcorp Industries Ltd Earnings Call Transcript
Aug 13, 2026 / 03:00AM GMT
Key Points
Positve
- Completed the acquisition of Alinta Energy, which on a pro forma basis would have lifted first-half underlying net profit to $558 million and annualized ROE to 19.1%, significantly broadening the earnings base.
- Increased interim dividend to $0.11 per share, up from $0.09 a year ago, reflecting confidence in full-year outlook and commitment to raising payout ratios toward peer levels.
- Secured a 2.6 GW Tawila Sea IPP in Abu Dhabi with a 21-year PPA, providing long-term earnings visibility and stable cash flows.
- Expanded data center and AI-driven power demand opportunities, including a 150 MW PPA with Micron (total 600 MW), a direct connection infrastructure agreement with Micron, and Wilton site positioned to deliver 280 MW of powered land by 2028.
- Alinta delivered a strong first-half performance with underlying net profit of $231 million, supported by high thermal fleet availability, low-cost generation, and new long-term gas supply contracts with Chevron and LNG Japan.
- Renewables pipeline in India remains a bright spot with 3.6 GW of high-tariff projects secured, and the group has 6.6 GW of renewable capacity under construction, positioning for future earnings growth.
- July 2026 showed strong momentum with Singapore USEP prices averaging $240/MWh and Alinta performing well across both East and West Coast markets, supporting a stronger second-half outlook.
- Tightened capital expenditure and investment spending (excluding Alinta) to $257 million in H1 2026 from $567 million a year earlier, demonstrating disciplined capital management.
- Achieved competitive financing for Alinta acquisition with a weighted average cost of debt of 3.4% and tenor of 6.6 years, lowering group weighted average cost of debt to 4.3%.
- Expanded Integrated Urban Solutions footprint in Vietnam with six new projects, growing gross development land area to over 18,000 hectares and ready-built facilities to over 1.1 million square meters, enhancing recurring income potential.
Negative
- Underlying net profit declined 25% year-on-year to $369 million in H1 2026, impacted by lower spark spreads, weaker renewables performance, and absence of SAM Enviro contribution.
- Renewables segment faced a challenging first half with underlying net profit down 48% to $69 million, due to weak wind and solar resources, curtailment, lower tariffs, and removal of VAT refund on onshore wind in China.
- Gas and related services saw a 14% decline in net profit, with Singapore down $33 million due to lower recontracted spreads and one-off gains not repeated, and UK down $22 million following closure of an industrial customer.
- Net debt increased by approximately $6 billion to $13.9 billion, largely due to the Alinta acquisition, resulting in a pro forma net debt to adjusted EBITDA of 5.3 times, which is elevated.
- Alinta's first-half performance included $100 million from optimizing green certificates that will not repeat in H2, and the company guided to only $100 million contribution in the second half, indicating a seasonal slowdown.
- China renewables portfolio is increasingly exposed to spot market, with around 50% of capacity now on spot, leading to higher volatility and lower tariffs.
- Battery storage prices in the UK declined by about $5 million in H1 due to supply-demand dynamics, impacting renewables earnings.
- Integrated Urban Solutions net profit declined by $16 million, partly due to the divestment of SAM Enviro and a delay in recognizing 40 hectares of land sales at Kendal Industrial Park, though the latter was booked in August.
- The group incurred $155 million in transaction costs related to the Alinta acquisition, which weighed on reported net profit.
- Geopolitical tensions and potential supply disruptions in the Middle East could impact gas prices and market stability, posing risks to future earnings.
Xin Jin
Sembcorp Industries Ltd - Head of Group Corporate Communications & Investor Relations
Ladies and gentlemen, a very good morning to everyone joining us both in person and online. Welcome to Semcorp Industries first half 2026 results presentation. I'm Sin Jin from Group Strategic Communications and Portfolio Management. Before we begin, may I kindly request that all mobile phones be switched off or set to the silent mode.
Thank you. Joining us on the panel today are our Group CEO, Mr Wong Kim In and our Group CFO, Mr Eugene Cheng. There will be a question-and-answer session following the presentation. For those joining us online, please submit your questions via the Q&A box by clicking on the raise hand icon on the webcast page. Without further delay, I will now hand over to Kim In to begin the presentation. Kim In, please.
Kim Yin Wong
Sembcorp Industries Ltd - Group President, Chief Executive Officer, Executive Director
Good morning. Welcome to SEI first-half '26 results briefing. Let me begin with the key highlights. For the first
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