Sembcorp Industries & Keppel Corp held their AGM on the same day & I decided to go for Sembcorp AGM as I want to gain insights of their Utilities business.
For Utilities business ,Chairman Ang mentioned the company adopt a prudent approach when investing in foreign countries. They will prefer to invest in the country which Utilities segment is not heavily subsidized by the local government because they do not want to be caught off guard when the subsidy is suddenly reduced or removed.
A shareholder asked will there be any rights issue on hand as Utilities is a capital intensive business. Chiarman Ang replied Sembcorp balance sheet is not highly geared unless exceptional rare investments turn up ,they might do rights issue for shareholders.
The best part is, Chairman Ang also mentioned they are looking to set up a fund management business for Utilities segment in the near future.
For UK steam energy business, CEO Tan mentioned they had reduced the workforce strength from 500 to below 200 while containing operations cost at the same time but growth is rather limited in the near future. I reckon SembCorp will divest this business if potential buyer appear.
Moving to Urban development business, Chairman Ang stressed that they are not typical real estate company but rather a assets light company. The income made from land sale is not significantly high & make lesser profits than real estate companies who build residential & commercial projects on the land they sold to. Now they are moving in the direction of selling the land & embark on residential & commercial projects. He quoted China Nanjing Eco city as an example, in order to build residential & commercial projects in the Eco City , they provide water treatment in the package to clinch the deal.
For Marine business, Chairman Ang acknowledged the stress in the marine segment due to its cyclical nature but he is confident it will be overcome & he pointed out FY2015 order book still going strong for marine business. A shareholder predict the downturn will last many years. but Chairman disagreed with him & from his point of view oil prices will not recover this year or next year but he is confident it will recover eventually.
He also mentioned SembCorp do not have the intention to delist Sembmarine.
I leave when the voting began as to avoid the crowd & anyway my shares is not significant to affect the voting result .
As usual, bento sets for lunch but comes in 3 different variety: Asians, Western & Japanese.
For Utilities business ,Chairman Ang mentioned the company adopt a prudent approach when investing in foreign countries. They will prefer to invest in the country which Utilities segment is not heavily subsidized by the local government because they do not want to be caught off guard when the subsidy is suddenly reduced or removed.
A shareholder asked will there be any rights issue on hand as Utilities is a capital intensive business. Chiarman Ang replied Sembcorp balance sheet is not highly geared unless exceptional rare investments turn up ,they might do rights issue for shareholders.
The best part is, Chairman Ang also mentioned they are looking to set up a fund management business for Utilities segment in the near future.
For UK steam energy business, CEO Tan mentioned they had reduced the workforce strength from 500 to below 200 while containing operations cost at the same time but growth is rather limited in the near future. I reckon SembCorp will divest this business if potential buyer appear.
Moving to Urban development business, Chairman Ang stressed that they are not typical real estate company but rather a assets light company. The income made from land sale is not significantly high & make lesser profits than real estate companies who build residential & commercial projects on the land they sold to. Now they are moving in the direction of selling the land & embark on residential & commercial projects. He quoted China Nanjing Eco city as an example, in order to build residential & commercial projects in the Eco City , they provide water treatment in the package to clinch the deal.
For Marine business, Chairman Ang acknowledged the stress in the marine segment due to its cyclical nature but he is confident it will be overcome & he pointed out FY2015 order book still going strong for marine business. A shareholder predict the downturn will last many years. but Chairman disagreed with him & from his point of view oil prices will not recover this year or next year but he is confident it will recover eventually.
He also mentioned SembCorp do not have the intention to delist Sembmarine.
I leave when the voting began as to avoid the crowd & anyway my shares is not significant to affect the voting result .
As usual, bento sets for lunch but comes in 3 different variety: Asians, Western & Japanese.
Thanks for sharing insights about Sembcorp. Are there any mention about the impact of oil prices towards SembCorp?
ReplyDeleteChairman Ang mentioned oil prices is highly correlated with its marine business.Demand & supply will come into play as deep sea oil is not worth exploring if oil prices is cheap & shale oil producer will not make money too but he is confident that the marine business will ride out this turbulent times
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