Energy price spike powers Sembcorp’s half-year profits
The group reported a 94% surge in profits.
Higher electricity prices in Singapore and India, as well as realised gains from favourable gas hedges in Singapore, boosted Semcorp Industries' half-year profits in 2022.
The group reported an increase of 94% in its net profit before exceptional items amounting to $490m, with higher contributions from the Renewables and Conventional Energy segments.
Sembcorp reaped a profit of $76m from its Renewables segment in H1 2022, an increase of $24m from the year before. The profitable half-year was attributed to contributions from SDIC New Energy and Shenzhen Huiyang New Energy in China.
Additionally, the company’s wind assets in India and solar operations in Singapore also performed better. Including the 0.9GW of renewables projects secured in H1 2022, gross renewables capacity (installed and under development) totalled 7.1GW. Net profit before exceptional items from the Integrated Urban Solutions segment dipped slightly a t$62m, compared to $63m in H1 2021.
Meanwhile, Sembcorp’s Conventional Energy segment posted a net profit of $397min H1 2022, an increase of 115% from $185m in H1 2021. The higher contribution was mainly due to higher electricity prices in Singapore and India, as well as realised gains from favourable gas hedges entered into in 2021.
Despite strong performance for the half-year, Sembcorp said the global economic outlooks continue to remain certain.
“Significant volatility in the commodity markets and supply chain risks caused by the ongoing geopolitical tensions, as well as tighter monetary policy to control inflation has increased the risk of a global recession, which could negatively impact performance. The group will continue to focus on the transformation of its portfolio from brown to green and the achievement of its 2025 targets,” Sembcorp said.