Sembcorp falls over 5% to hit two-month low

[SINGAPORE] Shares of energy and urban solutions provider Sembcorp Industries fell sharply in early trading on Monday (Oct 26), shedding over 5 per cent from their opening price.

As at 9.20 am on Monday, Sembcorp was trading at S$5.71, down S$0.30 or 5 per cent from its previous close, according to ShareInvestor. Some 2.3 million shares had changed hands. This was the lowest the stock has been trading since August. By 10.45 am, the counter pared its losses to 3.3 per cent, or S$0.20, to trade at S$5.81.

The counter closed at S$6.01 on Friday, up S$0.01 or 0.2 per cent, with about 2.2 million shares changing hands.

Monday’s decline came shortly after Minister for Energy, Trade and Industry (Energy and Industry) Tan See Leng said that Singapore will have to brace for greater risk of energy supply disruptions. His comments came as Indonesia began cutting natural gas exports to Singapore on Oct 24. Sembcorp is an importer of natural piped gas from Indonesia.

In a Monday report, DBS Group Research said Sembcorp was likely to face greater direct exposure to the disruption, as its pipeline gas supplies are sourced largely from Indonesia’s West Natuna region.

However, the brokerage noted that Sembcorp has long-term contracts with mechanisms allowing gas costs to be passed on to customers, as well as hedging arrangements to mitigate fluctuations in gas prices.

DBS said the supply reductions were manageable in the near term, but warned that further cuts and higher replacement gas costs could put pressure on power generation margins.

It added that the development could dampen recent optimism towards power companies, which had benefited from improving power spreads.

Sembcorp also reported a 72 per cent year-on-year decline in net profit to S$150 million for the first half ended June 2026, weighed down by one-off costs related to its acquisition of Australian energy provider Alinta Energy and weaker contributions from its core businesses.

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Sembcorp raises interim dividend despite 72% H1 profit slide to S$150 million on Alinta deal costs

For H1 FY2026, the group reported a 25 per cent year-on-year drop in underlying net profit to S$369 million, although it raised its interim dividend to S$0.11 per share from S$0.09 a year earlier.

The group said it expects a stronger performance in the second half of 2026, supported by a full six-month contribution from Alinta, higher land sales and improved earnings from its gas business.

However, Sembcorp cautioned that its renewables business would continue to face headwinds, including weaker wind and solar resources and lower tariffs in China.