Key Highlights from Sembcorp Industries Investor Day

November 21, 2023

Clean energy dividend stocks

Sembcorp Industries (SGX: U96), or SCI, has once again demonstrated its commitment to sustainable growth and innovation.

During its recent Investor Day, the company outlined an ambitious and transformative strategy for the upcoming years.

This strategy not only reaffirms Sembcorp’s leadership in the renewable energy sector but also showcases its dedication to a greener, more sustainable future.

Here are the key highlights from Sembcorp Industries’ Investor Day 2023.

1. Investment in Renewable Energy and Decarbonisation

Sembcorp announced a significant capital expenditure (capex) plan of S$14 billion for the period 2024-2028.

A substantial 75% of this investment, amounting to S$10.5 billion, is earmarked for renewable energy assets.

This strategic move is set to increase the gross installed capacity from the current 8.7 GW to an impressive 25 GW.

Additionally, S$1.4 billion is allocated for decarbonisation solutions, underlining the company’s commitment to reducing its carbon footprint.

2. Diverse Funding Strategy

To support this ambitious plan, Sembcorp has devised a diverse funding strategy.

This includes utilising 50% of the operating cash flow from existing gas-based energy assets, 30% from project debt, and the remainder from corporate debt, capital recycling, and private credit from third parties.

This approach ensures a stable financial base for the company’s expansion plans.

3. Emissions Reduction Goals

In line with global sustainability trends, Sembcorp is committed to significantly reducing its emissions intensity.

By 2028, the company aims to halve its emissions intensity from the forecasted 2023 level of 0.3 tCO2e/MWh to 0.15 tCO2e/MWh.

This goal is a testament to Sembcorp’s dedication to environmental stewardship.

4. Strategic Focus on Key Markets

Sembcorp has identified China and India as key growth markets for its renewable energy portfolio.

Both countries are expected to experience significant growth in the renewable sector, with a projected 17% CAGR between 2023-2028.

5. Urban Development and New Leadership

The Urban Development segment, despite facing challenges, is poised for growth, particularly in Vietnam and Indonesia.

The appointment of a new CEO and a strategic review indicate a renewed focus and potential stability in this division.

6. Financial Outlook

Sembcorp’s robust financial performance, evidenced by a net profit of S$952 million in the last 12 months, signals a strong foundation for its future endeavours.

The company’s dividend per share has also seen a notable increase, reflecting its growing profitability.

Clear and ambitious roadmap for the future

Sembcorp Industries’ Investor Day has laid out a clear and ambitious roadmap for the future.

The company’s commitment to expanding its renewable energy portfolio, coupled with a prudent financial strategy, positions it well for sustained growth.

As Sembcorp continues to transform and innovate, it not only contributes to a greener future but also offers promising prospects for its investors.

Now is the time to keep a close eye on Sembcorp’s journey and consider the potential opportunities it presents for a sustainable and profitable future.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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