SembCorp Industries delivers strong 22% growth in profit for FY2005

February 28, 2006

• PATMI BEFORE EI UP 22% TO $278.5 MILLION
• RECORD TURNOVER AT $7.4 BILLION, UP 25%
• FY2004 PATMI AFTER EI WAS HIGHER DUE TO GAIN FROM DIVESTMENT OF KNI STAKE

SembCorp Industries ended FY2005 on a strong note with a 22% growth in Profit After Tax and Minority Interest (PATMI) before exceptional items (EI) to $278.5 million. In FY2004, the company saw substantial EI arising from SembCorp Logistics’ divestment of its stake in KNI. This resulted in a gain of about $650 million for SembCorp Industries, close to half of which was returned to shareholders by way of special dividend and capital reduction in 2005.

SembCorp Industries’ FY2005 turnover rose 25% to reach a record of $7.4 billion. Excluding exceptional items, Return On Equity stood at a healthy 14.2%, while Earnings Per Share rose 26% to 15.7 cents in 2005. Group orderbook (excluding long-term contracts) was at a record $8.4 billion at the end of the year.

The achievement of double-digit top and bottom-line growth was driven primarily by Utilities and Marine operations, which together constitute 72% of the Group’s turnover.

Mr Tang Kin Fei, Group President & CEO said: “We have been focusing the Group on businesses and markets that would deliver sustainable earnings and growth. The strong performance of our businesses such as Utilities and Marine Engineering demonstrates the success of our strategy.”

Underpinned by stable earnings contribution from its Singapore operations and robust growth from the UK and Vietnam, the Utilities business led the growth with a 36% jump in PATMI before exceptional items to $147.1 million.

Marine delivered another year of record profits with a 22% increase in its contribution to Group PATMI before EI to $73.4 million. There was growth across all its business segments, particularly in rig building and offshore conversion, and a record $4.2 billion worth of contracts was secured in the year, up 102% from 2004. Current orderbook stands at $5.9 billion with completions and deliveries stretching all the way to 2009.

Logistics’ contribution to Group PATMI before EI stood at $32.7 million, with supply chain management remaining as the primary growth driver for the business in 2005.

2005 Dividend
In light of the strong operating performance in 2005, the Board of Directors is proposing a 30% increase in gross ordinary dividend to 6.5 cents per share.

2006 Outlook
Barring unforeseen circumstances, the Group's overall performance for 2006 is expected to be better than that of 2005.

HIGHLIGHTS
Delivered strong operating earnings growth

• Turnover at record-high of $7.4bn, up 25%
• PATMI before EI of $278.5m, up 22%
• PATMI before EI of $278.5m, up 45% (excl KNI)
• PATMI at $303.3m

Healthy balance sheet

• Net cash position
• Interest cover at 12 times
• Operating cash flow at $828m

Sustainable growth for the future

• Strong orderbook at $8.4bn (excl. long term contracts)