Sembcorp shares fall after Citi cuts profit forecasts
Sign up now: Get ST's newsletters delivered to your inbox
The Citi analyst said upcoming developments including, more expensive gas, could weigh on Sembcorp’s share price.
PHOTO: SEMBCORP
Shikhar Gupta
SINGPORE – Shares of Sembcorp Industries fell as much as 4.2 per cent to a four-month low of $5.93 on July 3 after Citi slashed its profit forecasts for the stock.
The counter recovered somewhat but closed down 3.4 per cent or 21 cents at $5.98, with about 19 million shares having changed hands.
In a report on July 2, Citi analyst Luis Hilado cut the brokerage’s recurring profit forecast for Sembcorp for the next three years by 6 to 11 per cent.
He also lowered the forecast for Sembcorp’s reported profit over the same period by 10 to 14 per cent, citing weaker prospects across several business segments.
Sembcorp’s earnings for the first half of 2026, which will be announced in August, are also expected to fall 26 per cent short of Bloomberg consensus estimates, he said.
The analyst also placed the stock on a 30-day negative watch, noting that upcoming developments could weigh on the share price.
These developments include more expensive gas, poor weather reducing the amount of power generated by its wind farms, and an unfavourable exchange rate between the Indian rupee and the Singapore dollar.
Hilado added that the extra, one-time costs tied to Sembcorp’s recent purchase of Alinta Energy has not yet been fully accounted for by other brokerages as well.
Despite these immediate hurdles, Citi still recommended buying the stock. By 2027, Alinta is expected to start generating significant profits and drive a strong financial recovery, said the note. THE BUSINESS TIMES
