[ad_1]
Mon, 07 Dec 2020 – 9:05 am
SEMBCORP Industries expects to incur a loss for the full year ending December 31, 2020, as a result of S $ 89 million in impairments, net of tax, recorded in the second half of 2020.
However, the industrial conglomerate expects to maintain positive operating cash flow in 2020, supported by the underlying profitable performance of its energy and urban businesses, it said in an earnings guide Monday.
The impairments come amid the unprecedented impact of Covid-19 on the global economic landscape and challenging market environment, Sembcorp Industries said.
It will record an impairment of approximately S $ 60 million for its UK power reserve assets as a result of a revised strategy for the business. The business will now focus on driving the value of its existing portfolio, primarily in the network services market.
The group will also record an impairment of S $ 21 million for utility assets on Jurong Island comprising a sewage treatment plant and a wood chip boiler facility. It expects sales volumes to be “negatively affected” by the departure of a major customer from the operations of its Singapore manufacturing facility on Jurong Island later this year.
Sembcorp Industries will see an impairment of S $ 8 million for a dedicated wastewater treatment plant in Nanjing, China, following the termination of a service agreement when the customer stopped production at its facility.
Following the completion of the in-kind distribution of common shares in the capital of Sembcorp Marine (Sembmarine), Sembcorp Industries recorded a non-recurring, non-cash loss of approximately S $ 1.12 billion. This was due to the fact that the fair value of the in-kind distribution of about S $ 1.6 billion as of September 11 was lower than Sembmarine’s book value of about S $ 2.72 billion as of June 30.
Sembcorp Industries said the loss will be adjusted based on the book value of Sembmarine shares through September 11.
The group said it monitors developments in its businesses and continues to review and assess the book value of its assets as it finalizes its 2020 fiscal accounts.
It will publish its unaudited consolidated financial results for the second half of 2020 and fiscal year 2020 on February 23, 2021.
Sembcorp Industries shares closed at S $ 1.85 on Friday, down S $ 0.01 or 0.5%.
[ad_2]
