Reported profit for utilities was $101 million, up 21% from a year ago. This included $13 million gain from the construction of a centralised utilities pipeline for a Singapore customer. There was also a $15 million gain from the divestment of medical waste and $25 million provision for fines for its overseas wastewater treatment business.
See: Sembcorp posts 11.6% lower 3Q earnings of $82.3 mil on higher expenses
Excluding all these, utilities profit was $78 million, below CGS’s expected $86 million.
India was profitable at $29 million, thanks to seasonal strength in wind power, high spot prices seen in the past two months, and the gradual expiry of short-term contracts at lower tariffs by Sept 18.
China was stronger than expected, with profit rising 45% q-o-q and 121% y-o-y to $22 million. UK/Americas recorded a small loss of $3.2 million. This was expected as UK Wilton had a four-week planned shutdown.
In a Friday report, analyst Lim Siew Khee says in 4Q18, the focus will be on how long the unplanned shutdown for one out of two boilers for Thermal Powertech Corporation India Limited (TPCIL) will be as TPCIL generally delivers $12 million-14 million of net profit per quarter.
Urban development saw a smaller profit q-o-q of $8.1 million after a good showing in 2Q18. Management expects the division to perform well in FY18. Note that it generated $83 million of profits in FY17. 9M18 profit from urban development stood at $53 million.
Key catalysts include consistent performance of the India operations and stronger-than-expected order wins in SembMarine.
Year to date, shares in Sembcorp are down 11.3% at $2.73.
