Sembcorp Industries (SBOA) Q2 2026 Earnings Report

The call presented a balanced picture: near‑term reported earnings and the Renewables segment were weak (H1 underlying net profit down 25%, renewables down 48%) and group leverage rose materially after the Alinta acquisition. Offsetting this, the strategic acquisition of Alinta materially strengthens the group's pro forma earnings and cash flow profile (Alinta H1 underlying profit +129% YoY), management increased the interim dividend while maintaining liquidity, and several operational catalysts (Taweelah C, hydrogen‑ready plant, Micron PPAs, Wilton powered land) plus favorable July market conditions support a stronger second half outlook. Management expects H2 2026 to be meaningfully stronger and highlighted capital discipline and multiple growth opportunities, but elevated post‑transaction leverage and China/renewables resource risks remain key near‑term negatives.

Management said it expects a meaningfully stronger H2 and reiterated its targets and balance‑sheet plans: H1 2026 reported turnover SGD 3.8bn, EBITDA ~SGD 768m, adjusted EBITDA SGD 947m, underlying net profit SGD 369m (down 25% y/y), EPS SGD 0.207 and annualized ROE 13% (pro‑forma with Alinta: turnover SGD 5.6bn, EBITDA SGD 1.2bn, adjusted EBITDA SGD 1.4bn, underlying net profit SGD 558m, EPS SGD 0.314, ROE 19.1%); interim dividend was raised to SGD 0.11 (from 0.09). Key operational and guidance metrics driving H2 upside include CCP4 and a 600MW hydrogen‑ready plant ramping (CCP4 on track for progressive commissioning, H2 completion Q4), 80% of Sembcorp’s gas‑fired fleet (ex‑Senoko) contracted for 5+ years, July USEP ~SGD 240/MWh, Alinta H1 run‑rate underlying profit SGD 231m with an expected ~SGD 100m contribution in H2, Alinta platform ~3.4GW, Renewables 6.6GW under construction and 3.6GW India pipeline, IUS landbank >18,000 ha and ready‑built GFA >1.1m sqm, adjusted free cash flow ~SGD 700m (adjusted), net debt ~SGD 13.9bn (up ~SGD 6bn on Alinta), pro‑forma net debt/adjusted EBITDA ~5.3x, weighted average cost of debt ~4.3% (Alinta funding ~3.4%, tenor ~6.6 yrs), 57% fixed hedging and committed undrawn facilities ~SGD 3.6bn.