Sembcorp Industries Ltd

For 1H26, turnover was SGD 3.8 billion, EBITDA was SGD 768 million, adjusted EBITDA was SGD 947 million, underlying net profit was SGD 369 million, EPS was SGD 0.207, and annualized group ROE was 13%. On a pro forma basis including Alinta for the full first half, turnover would have been SGD 5.6 billion, EBITDA SGD 1.2 billion, adjusted EBITDA SGD 1.4 billion, underlying net profit SGD 558 million, EPS SGD 0.314, and annualized group ROE 19.1%. Underlying net profit was down 25% year over year from SGD 491 million, and the group said free cash flow was SGD 373 million versus SGD 930 million on a like-for-like basis in 1H25 after adjusting for SembWaste sale proceeds. The interim dividend was increased to SGD 0.11 per share from SGD 0.09. For the full year, management said the second half should be stronger, and specifically guided Alinta’s 2H26 contribution to Sembcorp Group net profit at SGD 100 million; they also said 2H26 gas and related services should be meaningfully higher than 1H26. Net debt was about SGD 13.9 billion, net debt to adjusted EBITDA was 5.3x on a pro forma annualized basis, weighted average cost of debt fell to 4.3% from 4.5%, and committed unutilized facilities rose to SGD 3.6 billion from SGD 2.5 billion.

The CEO framed the quarter as one of portfolio transition: weak first-half operating performance, but with Alinta broadening earnings and increasing recurring cash-flow exposure. He emphasized that Sembcorp is positioning around AI and data center demand in Singapore, the U.K., Australia, and parts of ASEAN, citing over 1 gigawatt of PPA-secured demand in Singapore and the Wilton site’s powered-land advantage. His tone was constructive and confident, especially on the longer-term value of contracted gas, integrated platforms, and recurring income from urban and Alinta assets.

The CFO said 1H26 underlying net profit fell 25% to SGD 369 million mainly because of weaker gas spreads, renewables resource issues, and timing of urban land sales. He broke out the below-the-line items: a SGD 57 million foreign-exchange mark-to-market loss on the Indian rupee, a SGD 10 million fair-value loss on energy derivatives, and SGD 152 million of exceptional items, mostly SGD 155 million of Alinta transaction costs partly offset by a SGD 3 million China water divestment gain. He also highlighted tighter CapEx and investment spend excluding Alinta at SGD 257 million versus SGD 567 million a year ago, free cash flow of SGD 373 million, and net debt of about SGD 13.9 billion with ample liquidity.

Analysts focused on spark spreads, dividend policy, renewables capital allocation, China spot exposure, Alinta’s earnings quality, and whether imported renewables could cannibalize domestic generation. Management said the recent spark-spread strength is tied to firmer JKM and forward curves, but acknowledged it could change and that normalization may only come after 2026; they also said Sembcorp still sees opportunity to lock in better contracts if current conditions persist. On dividends, management pushed back against taking SGD 0.11 as a full-year run rate, but said the company is committed to steadily increasing payouts and that a higher second-half dividend is expected. On Alinta, management clarified that the business is not near breakeven on a full-half basis; they said the full first-half net income run rate was SGD 231 million, and the SGD 100 million 2H26 guide remains unchanged.