Singapore's SembCorp Indus Likely Earned S$76M In 3Q Pft

SINGAPORE --SembCorp Industries Ltd. (S36.SG) is expected to report a third-quarter net profit of S$76 million (US$1-S$1.7419) Tuesday, thanks in large part to exceptional gains.

Excluding the one-time gains, the Singapore conglomerate's net profit is likely to come in at S$45 million for the three months ended Sept. 30, according to the average estimate of four analysts polled by Dow Jones Newswires.

Their individual estimates for net profit before exceptionals ranged from a low of S$43.5 million to a high of S$48 million, while those for net profit after the gains were between S$74 million and S$79 million.

There aren't any comparable numbers for the third quarter of last year because the company began reporting on a quarterly basis only this year.

"Following the divestment of Pacific Internet shares and leisure assets in China, SembCorp Industries will book an exceptional gain of S$31 million for the quarter," said Lim Jit Soon, research head at Citigroup Smith Barney.

SembCorp Industries reduced its stake in Pacific Internet, a Nasdaq-listed Internet service provider, to 30.9% from 41% during the quarter.

In the second quarter to June 30, the utilities and shipyard conglomerate, majority-owned by the Singapore government, posted a 86% on-year jump in net profit to S$117.6 million. But excluding an exceptional gain of S$66.9 million, net profit for that quarter was S$50.6 million.

SembCorp Industries' operating earnings in the third quarter likely were driven by its utilities business, boosted by sales of natural gas and power to industrial users, analysts said.

Jesvinder Sandhu, an analyst at OCBC Investment Research, estimates that earnings from utilities accounted for 34% of net profit excluding exceptionals in the quarter.

In the second quarter, the contribution to net profit from the company's utilities division climbed 35% on year to S$20.6 million, largely due to the integration of its utility operations and profits from its new U.K. unit.

SembCorp Industries' listed units are expected to account for around 60% of its net profit before exceptionals in the third quarter, with strong earnings from SembCorp Logistics Ltd. (S66.SG) more than offsetting a slight decline in profits at SembCorp Marine Ltd. (S51.SG).

Net profit at SembCorp Marine, which is involved in the building and repair of ships, fell 2.3% to S$18.9 million in the third quarter to Sept. 30, while that at SembCorp Logistics rose 15% to S$23.6 million.

SembCorp Industries holds a 64% stake in SembCorp Marine. Southeast Asia's largest shipyard group, and a 61.7% stake in SembCorp Logistics, the region's largest logistics company.