Overseas utilities a new growth engine for Sembcorp?
INVESTORS in Sembcorp Industries have suffered a nerve-wrecking roller-coaster ride in the past year as the global oil rout takes its toll on players in the offshore and marine (O&M) industry, with shares in the company whipsawing according to oil prices and news relating to an overseas customer, Brazilian oil rigbuilder Sete Brasil.
But as contribution from Sembcorp's O&M unit starts to shrink, what could prove to be a silver lining is it utilities division, thanks to its far-sighted decision two decades ago to create this unit as a counterweight to the cyclical nature of the O&M arm.
As it builds its utilities business overseas, the shape of the group is starting to change - likely shifting its fortunes in a few years. However, while new projects will bring higher recurring earnings, teet…
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