The Singapore stock market remains a hunting ground for investors seeking stability and growth within the energy and engineering sectors.
As the global transition toward sustainability accelerates, two local heavyweights, Sembcorp Industries (SGX: U96) and Seatrium Limited (SGX: 5E2), have released their full-year 2025 (FY2025) financial results.
These earnings provide a crucial temperature check on how industrial giants are navigating volatile commodity prices and the capital-intensive shift toward green energy.
While one focuses on refining its renewable portfolio, the other is riding a wave of massive offshore project executions.
Sembcorp Industries: Balancing Growth and Transitions
Sembcorp Industries delivered a resilient performance in 2025, navigating a complex environment of shifting energy prices.
The group reported a 10% year-on-year (YoY) decline in revenue to S$5.8 billion, a contraction primarily sparked by lower electricity offtake and softening pool and gas prices in the Singapore market.
Performance was further hampered by reduced plant availability in the United Kingdom and the absence of revenue from its recently divested waste management arm.
However, the Renewables division acted as a vital stabiliser, with new capacity in India, Singapore, and the Middle East offsetting some of the top-line pressure.
On the bottom line, net profit attributable to owners saw a marginal 3% dip to S$984 million.
When stripping away exceptional items and currency fluctuations related to deferred payment notes, the core profit stood firm at S$1.0 billion, remaining essentially flat compared to the previous year.
A highlight for the year was the dramatic improvement in liquidity; free cash flow (FCF) swung into positive territory at S$208 million, a significant recovery from the negative S$196 million recorded in 2024.
This was largely due to a more moderate pace of capital expenditure.
Despite the mixed revenue figures, the board signaled confidence by raising the total ordinary dividend by 9% to S$0.25 per share.
With the Alinta Energy acquisition on the horizon for 2026, the group is positioned to broaden its earnings base even as it faces margin pressures in its Singapore gas business.
Seatrium: Riding the Offshore Momentum
Seatrium demonstrated significant operational momentum in 2025, benefiting from a robust cycle in the global offshore and marine industries.
The engineering specialist saw its revenue jump 24.3% YoY to S$11.5 billion, a surge driven by the successful achievement of production milestones across its diverse project slate.
This top-line growth translated into an even more impressive bottom-line result, as net profit more than doubled to S$323.6 million.
This profitability leap was fueled by a combination of higher revenue recognition, leaner overhead costs, and a stronger contribution from its associates, which helped mitigate a rising tax bill.
The group’s financial health also showed marked improvement.
FCF turned positive at S$19.7 million, reversing the previous year’s slight deficit.
As of year-end, Seatrium maintained a sturdy balance sheet with S$1.8 billion in cash against S$2.5 billion in borrowings, resulting in a manageable net debt of S$680.0 million.
For income-seeking investors, the most encouraging takeaway was the doubling of the final dividend to S$0.03 per share.
Looking ahead, Seatrium’s future appears well-supported by an enormous S$17.8 billion order book and a massive S$32 billion pipeline of potential deals.
Management’s focus on high-value projects and strict financial discipline suggests a clear path toward margin expansion.
By diversifying its reach into offshore wind and conversion projects, Seatrium is effectively positioning itself as a vital partner in the global energy evolution.
Get Smart: A Tale of Two Turnarounds
Both Sembcorp and Seatrium are proving they can generate positive cash flow in a demanding environment.
Sembcorp’s dividend hike reflects a mature business transitioning toward green energy, while Seatrium’s doubling of profit highlights a successful turnaround post-merger.
The key is patience.
Sembcorp’s growth rests on its 2030 renewable targets, while Seatrium’s success depends on converting its massive S$32 billion pipeline into profitable reality.
These results suggest that both companies have the discipline to reward shareholders while investing in their future.
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Disclosure: The Smart Investor does not own shares to any companies mentioned.
