SCI

SCI: 1Q14 net profit rose 4.5% y/y to $184.8m, while revenue increased 11.8% to $2.6b, mainly due to Sembcorp Marine’s higher contribution (+27% to $1.3b) on recognition of rig building and offshore projects. Utilities saw a 3% slip to $1.2b on the deconsolidation of Salalah. However, growth in at net profit level was spurred by Urban Development which rose 192% to $19.5m on strong contributions from its Nanjing Eco Hi-tech Island project in China. This was offset by Others/Corporate division which swing from $8.8m to a minor loss of $0.5m. Urban Development’s performance should continue throughout the year in anticipation of land sales in China and Vietnam. By 2016, SCI’s utilities development pipeline would see its gross power capacity increase by 76% to 7,300MW, while water capacity is expected to rise by 21% to 8.6m m3/day. These additions are critical in driving future growth as power price pressure in Singapore mounts. Latest broker ratings: Maybank maintains Hold with lower TP of $5.31 (from $5.51) Deutsche maintains Hold with TP $5.20