Latest news with #SembcorpIndustries
Time of India
5 days ago
- Business
- Time of India
Sembcorp bags 150 MW solar project with 300 MWh storage capacity from SJVN
New Delhi: Sembcorp Industries , through its wholly-owned subsidiary Sembcorp Green Infra Private Limited (SGIPL), has secured a 150 MW solar power project integrated with a 300 MWh Battery Energy Storage System (BESS) from SJVN Limited . The Letter of Award issued by SJVN is part of its 1.2 GW tender for Inter-State Transmission System (ISTS)-connected solar projects with a total of 600 MW/2.4 GWh of battery storage capacity. The project will be implemented on a build-own-operate basis and is expected to commence commercial operations within 24 months from the signing of the 25-year Power Purchase Agreement (PPA). Upon completion, the project will supply solar power and support peak electricity demand for four hours daily through the BESS. Funding for the project will be sourced through a mix of internal funds and debt. This is Sembcorp's second solar-energy storage hybrid project in India. With this award, the company's gross renewables capacity in India has increased to 6.3 GW. Sembcorp's global renewables portfolio, including acquisitions pending completion, now stands at 17.7 GW.
Business Times
26-05-2025
- Business
- Business Times
Clean energy trade in Asean has the wind beneath its wings
[SINGAPORE] Even as global energy markets face uncertainty, Asean is in a prime position to not only step up green energy production, but also trade it throughout the region. On Monday (May 26), several South-east Asian energy players – including Singapore's Sembcorp Industries – formed a partnership to evaluate the feasibility of exporting renewable energy from Vietnam to Malaysia and Singapore via a new subsea cable. This partnership rides on Vietnam's rich renewable energy resources, especially offshore wind power. Another tailwind is the strong demand for clean energy imports from Singapore. The city-state aims to import about 6 gigawatts (GW) of low-carbon electricity by 2035 – accounting for a third of its energy demand then. Such projects are increasingly economical as clean power becomes cheaper. Between 2010 and 2020, the cost of wind and solar power fell by 55 per cent and 85 per cent respectively, according to a report by energy think-tank Ember. Wind and solar energy are expected to generate between 23 and 25 per cent of electricity in Asean by 2030, up from 4 per cent currently, the report estimates. The key constraint of both wind and solar power is intermittency, due to variations in the availability of sunlight and sufficiently-strong wind. There is also the risk of curtailment, where the amount of electricity generated has to be restricted as the grid infrastructure is not sufficiently developed. However, such constraints create a strong opportunity for the export and trade of renewable energy, as part of a broader 'Asean power grid' – a concept mooted way back in 1997, which has only begun to gain momentum more recently. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up There have been two big multilateral projects: the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), launched in 2022, and the Brunei-Indonesia-Malaysia-Philippines Power Integration Project (BIMP-PIP), unveiled the following year. Bilateral projects are also in the works, such as Sarawak Energy's deal for a hydropower project that could supply Singapore with 1 GW of green electricity. 'By linking national grids, countries can share clean energy resources across borders – reducing the risks of curtailments and smoothing variability from solar and wind over a wider geographic area,' said Ember in the report. The think tank estimates that a regional grid could add another 24 GW of solar and 5.6 GW of wind capacity in Asean. This could lift the bloc's gross domestic product growth by 0.8 percentage point to 4.6 per cent, while adding 182,000 jobs. That said, the Asean power grid can only happen with strong political will, a common set of regulations, and sufficient investments. Filling the financing gap will be especially challenging, as many investors shun regional grid projects for being too complex and requiring too much time. The current backlash against green energy – led by US President Donald Trump – and the impact on energy prices could add to investor jitters. That said, the economics of clean energy trade in Asean are undeniable. As geopolitics cast a pall on global energy markets, an Asean power grid can not only help the region decarbonise, but also insulate against energy shocks. The onus will be on Asean governments and development finance institutions to come up with innovative financing structures that draw in investors.
Yahoo
22-05-2025
- Business
- Yahoo
Why Sembcorp Industries Ltd (SGX:U96) Looks Like A Quality Company
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. To keep the lesson grounded in practicality, we'll use ROE to better understand Sembcorp Industries Ltd (SGX:U96). Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Sembcorp Industries is: 18% = S$1.0b ÷ S$5.7b (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. That means that for every SGD1 worth of shareholders' equity, the company generated SGD0.18 in profit. Check out our latest analysis for Sembcorp Industries By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As is clear from the image below, Sembcorp Industries has a better ROE than the average (7.6%) in the Integrated Utilities industry. That is a good sign. However, bear in mind that a high ROE doesn't necessarily indicate efficient profit generation. Especially when a firm uses high levels of debt to finance its debt which may boost its ROE but the high leverage puts the company at risk. Our risks dashboardshould have the 2 risks we have identified for Sembcorp Industries. Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. That will make the ROE look better than if no debt was used. Sembcorp Industries clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.53. While its ROE is respectable, it is worth keeping in mind that there is usually a limit as to how much debt a company can use. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it. Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking this free report on analyst forecasts for the company. If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
14-05-2025
- Business
- Business Times
Sembcorp's renewables business could power earnings upside; Goldman Sachs initiates at ‘buy'
[SINGAPORE] Goldman Sachs has initiated coverage of energy and urban solutions provider Sembcorp Industries with a 'buy' recommendation and a target price of S$8.40 on the back of its 'solid business model'. The target price implies a potential upside of 27.9 per cent from Sembcorp's closing price of S$6.57 on Tuesday (May 13). In a May 8 report, Goldman Sachs analysts Nikhil Bhandari and Wayne Wang noted that Sembcorp is 'attractively valued', with the market pricing its renewables business at a level aligned with its peers in China and developed markets. 'Despite the company's China exposure, where curtailment rates are rising, we believe the current valuation is overly punitive,' the analysts said. 'Sembcorp is rapidly expanding in regions with more favourable dynamics, such as India and the Middle East, where renewables are cheaper on the power cost curve, and in areas like the Philippines and the UK, where power supply demand is tight,' they added. 'This expansion drives faster earnings growth compared to China and developed market peers.' In addition, Goldman Sachs forecasts that China's share of Sembcorp's renewables capacity, on an equity-adjusted basis, will fall from 48 per cent in 2024 to 26 per cent by 2028. Meanwhile, India's share is expected to rise to 46 per cent. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We believe that maintaining a presence and relationships in China, albeit reduced, could provide synergies to the ex-China business through upstream sourcing capabilities for round-the-clock projects, especially batteries, which are a key bottleneck in regions like India,' said Bhandari and Wang. The way the analysts see it, Sembcorp's profit after tax could increase at a compound annual growth rate (CAGR) of close to 14 per cent from 2024 through to 2028. They believe some 70 per cent of profits could come from fixed return contracts – with an average duration of over five years – that offer higher returns compared to its utility and renewables peers. For the full year ended Dec 31, 2024, Sembcorp reported earnings of S$1.01 billion, up 7 per cent from S$942 million the previous year. Net profit before exceptional items and discontinued operation was S$1.02 billion, comparable to financial year 2023, despite a planned major maintenance in the first half of 2024. Goldman Sachs sees several key catalysts for driving a continued rerating of Sembcorp's valuation. These include an optimisation of its portfolio, steady capacity growth, and a potential upward revision of its long-term return on equity guidance. 'Sembcorp has consistently optimised its portfolio through capital recycling and its share price has historically reacted positively to such transactions,' the analysts said. 'Overall, we believe the company will continue to optimise its portfolio to position the core renewables and gas divisions for growth and higher returns.' DBS Group Research analyst Ho Pei Hwa believes Sembcorp could see an uplift in its price-to-earnings valuation multiple, on the back of accretive acquisitions in new renewable markets, steady earnings delivery and potential capital recycling that is value-unlocking. 'Sembcorp is set to deliver promising earnings CAGR of more than 10 per cent through 2028 as its three key business segments enter expansion mode,' Ho said in a report following Sembcorp's FY2024 results, noting that the company is 'firing on all cylinders'. DBS has a 'buy' call on Sembcorp with a target price of S$8. Meanwhile, HSBC Global Research analyst Rahul Bhatia sees Sembcorp as 'a good defensive play in current uncertain times'. 'We think a combination of high power generation capacity, direct access to gas (via import licence) and availability of green power gives Sembcorp a strong position in the Singapore market,' Bhatia said in an Apr 15 report. 'Further, we note a large portion of Sembcorp's group profit – about 77 per cent – is backed by long-term power purchase agreements,' he added.
Business Times
09-05-2025
- Business
- Business Times
Sembcorp, Aster sign over S$650 million in energy and utilities deals for regional projects
[SINGAPORE] Energy provider Sembcorp Industries and Aster Chemicals and Energy on Friday (May 9) announced new regional energy and utilities partnerships in South-east Asia worth over S$650 million. As part of the deals, Sembcorp will supply a suite of gas, power and utilities solutions to Aster, a chemical and energy solutions provider in Singapore and Asia-Pacific. Aster operates an integrated refining and chemical complex in Pulau Bukom and Jurong Island. Sembcorp and Aster also signed a memorandum of understanding (MOU) to explore strategic initiatives across Singapore, Indonesia and the rest of South-east Asia. This includes collaborating on cogeneration and utilities projects, regional gas procurement, joint infrastructure investments, and establishing industrial parks in Indonesia. The signings of the deals and MOU are not expected to have a material impact on Sembcorp's earnings per share and net tangible assets per share for the financial year ending Dec 31. On Apr 9, Sembcorp's wholly owned subsidiary Green Hydrogen India entered a joint venture deal with Indian oil and gas company Bharat Petroleum for renewable energy and green hydrogen projects, designed to support India's energy transition and development goals. Shares of Sembcorp were trading 1.4 per cent or S$0.09 higher at S$6.60 as at 4.34 pm.
