Sembcorp Industries pushes results announcement

It has yet to address its Indian IPO and Sembmarine collaboration.

Sembcorp Industries (SCI) is pushing the release of its results to 23 February, and DBS Equity Research expects that it could also announce the outcome of its strategic review.

According to a report, one of the topics SCI could address is the initial public offering of its Indian assets.

Singapore Business Review previously reported that local media said SCI is preparing to list its Indian unit, which consists of thermal and renewable power assets.

DBS analyst Pei Hwa Ho said, "The listing of SCI’s mature assets with steady cashflow would help release capital for recycling and provide an uplift to return of equity (ROE)."

"We believe it makes sense to list the first power plant, Thermal Powertech Corporation India (TPCIL), which is churning stable recurring profits backed by long-term PPA. The plant is expected to contribute c.$60m to SCI’s net earnings," Ho added.

Another topic SCI could address is whether SCI will drop Sembcorp Marine (Sembmarine) or not.

"We are a believer of SCI’s spinning off SMM to stay focused on its core competency in utilities," Ho said.

This could provide an immediate uplift to the valuation of the utilities business, which has been trading at an unwarranted 30-40% discount to book.