Sembcorp Industries to record $245m material impairments in Q4 2019

It expects its energy business to see a net loss.

Sembcorp Industries will record material impairments of $245m in its Q4 2019 financial statements, the group said in a profit guidance.

The bulk of the reduction comes from a $158m impairment of its UK Power Reserve (UKPR) assets, in which the business’ performance was partly impacted by an increase in energy capacity and a reduction in underlying demand due to energy efficiency and reduced industrial production.

The company will also record $64m impairments from divesting its water business in Chile, and $23m in China for its wastewater treatment assets. The value of its Chilean business was partly affected by escalating operational and regulatory costs, whilst its Chinese assets were unable to meet new and more stringent effluent discharge standards.

Because of these, the group expects its energy business to post a net loss in Q4. For the full year, the company is optimistic for a net profit.