Sembcorp Industries suffers 13.3% profit drop to $165.4m

Slower order book in marine segment.

According to OCBC, Sembcorp Industries (SCI) reported a 6.3% YoY fall in revenue to S$2.5b and a 13.3% decrease in net profit to S$165.4m in 2Q13, such that 1H13 figures accounted for about 45% of the firm's full year estimates.

There was a slower order book drawdown in the marine division in the quarter as fewer projects achieved their initial recognition milestones, while 1H13 revenue from the utilities division accounted for about 47% of our full year estimate. Utilities and marine contributed 53% and 39% of SCI’s net profit in 1H13, respectively.

Here's more from OCBC:

SCI saw a S$24.5m loss in fair value of available-for-sale (AFS) assets, mainly due to Gallant Venture’s drop in share price. Recall that the investment was reclassified as an AFS financial asset on 30 Apr 2013 with SCI’s dilution in stake.

Excluding this one-off item, 2Q13 net profit would have been flat vs a year ago. Looking ahead, we understand that subsequent upward revaluations (if any) will be recorded under comprehensive income and will not impact the income statement.

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