Download Annual Report 2008 - Sembcorp

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GroupStructureSEMBCORP INDUSTRIESSUT Division Singapore 100%Propylene Purification Unit Singapore 100%UTILITIESMARINEENVIRONMENTINDUSTRIAL PARKSSembcorp Utilities 100% Sembcorp Marine 61.6% **Sembcorp Cogen Singapore 100% Jurong Shipyard Singapore 100%Sembcorp Power Singapore 100%Sembawang Shipyard Singapore 100%Sembcorp Gas Singapore 70%PPL Shipyard Singapore 85%Sembcorp Air ProductsSMOE Singapore 100%(HYCO) Singapore 60%Jurong SML Singapore 100%Sakra Island Carbon Dioxide Singapore 30%Sembcorp MarineSembcorp NEWater Singapore 100%Technology Singapore 100%Sembcorp Utilities (UK) UK 100%COSCO Shipyard Group China 30%Sembcorp Utilities InvestmentManagement (Shanghai) China 100%Shanghai Cao JingCo-generation Co China 30%Nanjing Sembcorp SUIWU Co China 95%NCIP Water Co China 95%Zhangjiagang Free Trade ZoneSembcorp Water Company China 80%Zhangjiagang Free Trade ZoneSembcorp Water RecyclingCompany China 80%Sembcorp Tianjin LingangIndustrial Area WastewaterTreatment Co China 90%Shenyang Sembcorp Water Co China 80%Shenzhen Chiwan SembawangEngineering Company * China 32%Phu My 3 BOT PowerCompany Vietnam 33.3%Emirates Sembcorp Water& Power Company UAE 40%Sembcorp Gulf O&M Co UAE 100%Shenzhen Chiwan OffshorePetroleum Equipment Repair& Manufacture Company China 35%PT Karimun SembawangShipyard Indonesia 100%PT SMOE Indonesia Indonesia 90%Sembcorp-Sabine Shipyard USA 100%SembMarine Middle East Saudi Arabia 60%Sembcorp Environment 100% Sembcorp Industrial Parks 100%SembWaste Singapore 100% Vietnam SingaporeIndustrial Park JV Co Vietnam 40.4%Sembcorp Tay PaperRecycling Singapore 60% Vietnam Singapore Industrial ParkSembSITA Australia Australia 40%SembRamky EnvironmentalManagement India 51%& Township Development JointStock Company Vietnam 40.3%Wuxi-Singapore Industrial ParkDevelopment Co China 45.4%Gallant Venture Singapore 23.9%Sembcorp Parks Management 56%OTHER BUSINESSESSembcorp Design and Construction 100%Singapore Precision Industries 100%Singapore Mint Singapore 100%Figures reflect effective shareholdings as at January 31, 2009*Shenzhen Chiwan Sembawang Engineering Company’s financial contribution to the Group is reported under Other Businesses.**Calculated based on the number of issued ordinary shares excluding treasury shares.22 Delivering Essential Solutions Sembcorp Industries Annual Report 2008 23
Operating & Financial ReviewGroupReviewPERFORMANCE SCORECARD (S$ million)2008 2007 Change (%)Turnover 9,928.4 8,618.8 15EBITDA 939.6 824.0 14EBIT 744.4 641.1 16PBT 861.9 787.1 10PATMI before EI 534.0 557.2 (4)PATMI after EI 507.1 526.2 (4)EPS before EI (cents) 30.0 31.3 (4)EPS after EI (cents) 28.5 29.6 (4)ROE before EI (%) 19.0 19.0 –ROE after EI (%) 18.0 18.0 –OVERVIEWIn 2008, Sembcorp achieved 15% growth in turnoverto S$9.9 billion. Group profit after tax and minorityinterest (PATMI) before exceptional items (EI) in 2008was S$534.0 million compared to S$557.2 million in2007. In 2007, excluding the one-off tax write-back ofS$48 million, PATMI before EI was S$509.2 million.During the year, the Group recorded an exceptionalloss of S$26.9 million comprising of the Group's shareof Marine business’ foreign exchange losses from theunauthorised transactions.TURNOVERThe Group achieved a record turnover of S$9.9 billionfor the financial year 2008.Utilities’ turnover increased by 20% to S$4.5 billionin 2008. The increase in turnover was fuelled by a risein high sulphur fuel oil prices (HSFO) offset by theexpiry of favourable supply contracts in the UK anddepreciation of the pound sterling which resulted inlower turnover in Singapore dollar terms.Turnover for Marine increased by 12% to S$5.1 billion.This was mainly due to a higher percentage ofcompletion achieved in rig building, offshore, conversionprojects and higher repair sales.Environment’s turnover increased by 4% toS$213.8 million, mainly due to higher turnover fromits paper recycling division.The decrease in turnover for the Industrial Parksbusiness was mainly attributable to the divestment ofWuxi Garden City Mall in May 2007.Turnover of Others / Corporate was mainlycontributed by subsidiaries dealing in specialisedconstruction activities and minting.EARNINGSExcluding the one-off write-back of S$48 millionof tax provisions recorded in 2007, the Group achieveda growth of 6% in PATMI, mainly contributed bystrong performance in Marine’s rig building and shiprepair businesses.Utilities’ 2008 PATMI was S$200.3 million comparedto S$230.2 million in 2007. This was primarily due tolower contributions from its UK operations, whichwas impacted by lower profit margins and erosionof its contribution in Singapore dollar terms due todepreciation of the pound sterling. In 2007, the UK’sperformance also enjoyed a boost from the profiton the sale of land. Utilities’ operations in Singaporerecorded higher PATMI for the year primarily froma gain on the sale of transmission and distributionpipeline assets in Singapore to PowerGas, as well asthe gain from the sale of strategic diesel. In 2007,Utilities’ operations in Singapore was impacted by themaintenance inspection and repair of gas turbines atits cogeneration plant during that year. Meanwhile,operations in China continued to do well and operationsin the Middle East performed according to plan.PATMI BEFORE EI (S$ million)2007 2008• Utilities 230 200• Marine 220 291• Environment 14 2• Industrial Parks 34 32• Others / Corporate 59 9557 53420072008Marine’s contribution to Group PATMI rose 32%to S$290.6 million, mainly due to higher operatingmargins from its rig building and ship repair businesses,partially offset by lower share of results from itsassociates, mainly Cosco Shipyard Group.The performance of our Environment businesswas affected by higher operational costs and lowerrecyclables volume, in addition to an impairment onpart of its plant and machinery in 2008.The decline in Sembcorp’s share of PATMI from ourIndustrial Parks business was mainly attributed to lowerprofit contribution from its associate, Gallant Venture.The decline in Others / Corporate PATMI in 2008was mainly due to weak performance by an offshoreengineering associate in China. In 2007, there was awrite-back of S$48 million of tax provisions made inprior years for the gains on divestment of an investment,following the favourable tax ruling by the InlandRevenue Authority of Singapore.CASH FLOW AND LIQUIDITYAs at December 31, 2008, the Group had cash andcash equivalents of S$2.4 billion.5575340 100 200 300 400 500 600TURNOVER (S$ million)PATMI AFTER EI (S$ million)2007 20082007 2008• Utilities 3,736 4,478• Marine 4,512 5,061• Environment 205 214• Industrial Parks 23 16• Others / Corporate 143 1598,619 9,928200720088,6190 2,000 4,000 6,000 8,000 10,0009,928• Utilities 230 200• Marine 150 264• Environment 14 2• Industrial Parks 73 32• Others / Corporate 59 9526 507200720085265070 100 200 300 400 500 60024 Delivering Essential Solutions Sembcorp Industries Annual Report 2008 25
Page 1 and 2: Sembcorp Industries LtdDelivering E
Page 3 and 4: Sembcorp is in the business of prov
Page 5 and 6: Marine &Offshore SolutionsOver more
Page 7 and 8: Letter toShareholdersenvironment, w
Page 10 and 11: Five-YearPerformance ProfileTURNOVE
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Page 16 and 17: Operating & Financial ReviewGroupRe
Page 18 and 19: Operating & Financial ReviewGroupRe
Page 20 and 21: Operating & Financial ReviewUtiliti
Page 22 and 23: Operating & Financial ReviewMarineR
Page 24 and 25: Operating & Financial ReviewIndustr
Page 26 and 27: Boardof Directors(From top, left to
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Page 30 and 31: CorporateGovernanceSembcorp’s cor
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Page 46 and 47: Directors’ReportYear Ended Decemb
Page 58 and 59: Balance SheetsYear Ended December 3
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Notes to theFinancial StatementsYea
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SupplementaryInformationYear Ended
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Shareholders’InformationCorporate
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Notice ofAnnual General Meetingprov
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Notes:1. Please insert the total nu
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