Sembcorp Industries reports S$131m net loss for H1 2020 due to Covid-19

SEMBCORP Industries has reported a net loss of S$131 million for the first half of 2020, compared to the S$191 million net profit for H1 2019, said the mainboard-listed company. 

Its financial statements posted on the Singapore Exchange on Friday after trading hours also indicated that the group is expecting full-year losses for the current financial year as a result of the severe impact of Covid-19.

The losses in H1 2020 were felt in three of the group's four business units - the energy, marine and corporate segments. The only unit that reported a net profit - of S$38 million - was its urban segment, which handles integrated urban projects such as industrial parks as well as business, commercial and residential spaces in Asia.

"The group expects to incur losses for the full year due to the expected continuing losses at Sembcorp Marine and exceptional items recorded in H1 2020," Sembcorp said.

Its marine segment was the hardest hit, chalking up a net loss of S$117 million, extending the S$6 million loss of H1 2019.

While the marine business is resuming gradually, Sembcorp noted that its business outlook in subequent quarters will depend on how soon its workforce will be allowed to return to full strength.

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Meanwhile, the reduced economic activity in multiple markets due to the pandemic has also depressed energy demand and prices, Sembcorp noted.

"In the second quarter of 2020, energy demand in Singapore, India and the UK declined by approximately 5 per cent to 20 per cent compared to the same period last year. The underlying performance of the energy business in 2020 is expected to be markedly lower than 2019," it said.

The energy segment recorded a S$5 million net loss, a drastic reversal from the S$177 million net profit it reported in the same period the previous year.

Sembcorp added that the net profit for its energy business for the full year is also expected to be affected by the loss of contribution from divested assets and the absence of one-off income in Myanmar.

Other "exceptional items", which include a loss of S$161 million and the expected currency loss upon the completion of its Chilean water business, are expected to have an adverse impact on its full-year net profit.

Sembcorp's shares closed flat at S$1.78 on Friday.