By Yang Huiwen

A STRONG effort from the marine building unit failed to offset weaker contribution from other units and resulted in flat growth in third-quarter earnings for Sembcorp Industries.

Net profit for the three months to Sept30 rose 2.2 per cent, from $144.9 million to $148.1 million, but this was still higher than the $140 million consensus forecast by five analysts in a Dow Jones poll.

Earnings were partly weighed down by lower contributions from associates and joint ventures, particularly Cosco Shipyard Group.

Turnover rose 3 per cent, from $2.5billion to $2.58billion, as strong earnings growth from marine was undermined by a fall in contributions from the utilities environment and industrial parks businesses.

Revenue for marine, the largest contributor to earnings and turnover, rose 33 per cent to $1.52 billion due to completions in rig building and offshore and conversion projects.

Its utilities business saw revenue fall by 23per cent to $981.9 million in the three months to Sept30. The Singapore unit delivered lower contributions due to falling oil prices while facility closures in Britain meant Sembcorp lost customers who had contributed about 30 per cent of turnover in the United Kingdom.

Chief executive Tang Kin Fei addressed concerns about this, and said 'we still have a credible, profitable business in the UK'.

But the group expects to see a more robust performance from its utilities operations in China, the Middle East and Vietnam. Overseas operations make up about 39per cent of profits and the firm expects strong growth from these three markets.

'The water business (in China) is satisfactory but can be better,' said Mr Tang at a media and analysts' teleconference.

There is a lot of capacity and growth potential from its water assets in China, he added. He cited its wastewater treatment plants in Nanjing and Tianjin, which can take on more capacity and so generate more income without requiring further capital expenditure.

The group is also negotiating with possible buyers for excess capacity at its Fujairah power and desalination plant in the United Arab Emirates.

Chief financial officer Lim Joke Mui said: 'Sentiments relating to the global economic and financial environment have improved. However, the recovery of the global economy will take time.'

Earnings per share for the quarter rose 2.2 per cent to 8.33 cents while net asset value stood at $1.72 per share as at Sept 30, up from $1.46 in December. Sembcorp shares rose five cents to $3.26 yesterday ahead of the results announcement.

This article was first published in The Straits Times.