 |
FUNDING
In the course of the year, we increased our Medium Term Note Programme
from S$500 million to S$2 billion in line with our strategy to diversify
our sources of funding. We continue to seek to expand our relationships
with banks in Singapore for access to bilateral facilities. The increase
in funding resources will allow SembCorp Industries to grasp opportunities
as they arise.
We reduced our net borrowings by about S$900 million by utilising
proceeds from divestments and cashflows generated from our operations.
Net gearing was reduced to 0.6 times from 1.3 times, attributable
to the lower borrowings and improved shareholders’ funds from
the share placement during the year, and proceeds from divestments
and profits for the year.
We are focused on maintaining an appropriate mix of committed and
uncommitted facilities, fixed and floating rate borrowings, prudent
financial ratios and reducing the cost of funding. As such, committed
funding consists of 84 per cent of the Group’s borrowings and
66 per cent of the overall debt portfolio is not exposed to interest
rate fluctuations. The maturity profile of SembCorp Industries is
now more evenly spread over different maturities that reduce the impact
of refinancing risks. The weighted average cost of funding has been
reduced to 4.0 per cent from 4.6 per cent in the previous year.
IMPROVEMENT IN WORKING CAPITAL
MANAGEMENT
We have made a concerted effort towards improvement of our cashflow
generation and have generated an improved cashflow from operations
of S$530 million compared to a negative cashflow of S$109 million
in the previous year. This improvement of cashflow by S$639 million
was achieved through greater efficiency of debt collection and a
more effective creditor management.
RISK MANAGEMENT
We have strengthened our risk management through an Enterprise Risk
Management programme to raise the awareness of the importance of
risk management in all activities carried out throughout SembCorp
Industries. Steps are underway to incorporate risk management perspectives
in core operational activities.
Chief Risk Officers have been appointed in SembCorp Industries and
its Key Businesses to coordinate and implement the Enterprise Risk
Management programme and a structured and systematic approach towards
risk management, risk assessment plans and reporting.
FINANCIAL DISCIPLINE AND CORPORATE
GOVERNANCE
A systematic approach has been introduced for SembCorp Industries
and its Key Businesses to review financial discipline in the Group.
We have set up a certification process for our major subsidiaries
to confirm their commitment to and compliance with a prudent financial
discipline framework.
The framework provides for checklists to systematically highlight
the requirements of new accounting standards, recognition of foreseeable
losses and impairment of assets. It also establishes the propriety
of revenue and cost recognition, assets valuation, liabilities recording
and allows for early identification of areas of potential exposures
which can then be addressed to minimise any adverse impact to the
Group.
FINANCING & TREASURY HIGHLIGHTS
| |
|
2002
S$m |
% |
2001
S$m |
% |
|
|
| |
SOURCE OF FUNDING |
|
|
|
|
|
| |
Funded bank facilities, capital
markets and available funds |
|
|
|
|
|
| |
Funded facilities available for drawdown |
4,520 |
|
3,379 |
|
|
| |
Cash and cash equivalents |
482 |
|
409 |
|
|
| |
Total facilities and available funds |
5,002 |
|
3,788 |
|
|
| |
Less: Amount drawn down |
(1,615) |
|
(2,384) |
|
|
| |
Unutilised funded facilities and funds available |
3,387 |
|
1,404 |
|
|
| |
|
|
|
|
|
|
| |
Unfunded bank facilities |
|
|
|
|
|
| |
Unfunded facilities available for drawdown |
1,285 |
|
1,076 |
|
|
| |
Less: Amount drawn down |
(890) |
|
(736) |
|
|
| |
Unutilised unfunded facilities available |
395 |
|
340 |
|
|
| |
|
|
|
|
|
|
| |
Total unutilised facilities and
funds available |
3,782 |
|
1,744 |
|
|
| |
|
|
|
|
|
|
| |
Committed facilities |
|
|
|
|
|
| |
Committed facilities available |
1,517 |
|
1,669 |
|
|
| |
Amount drawn |
1,517 |
|
1,669 |
|
|
| |
|
|
|
|
|
|
| |
PROFILE OF GROUP BORROWINGS |
|
|
|
|
|
| |
Maturity profile |
|
|
|
|
|
| |
Due within 1 year |
408 |
22 |
1,153 |
44 |
|
| |
Due between 1 to 2 years |
252 |
14 |
21 |
1 |
|
| |
Due between 2 to 5 years |
575 |
32 |
455 |
17 |
|
| |
Due after 5 years |
580 |
32 |
979 |
38 |
|
| |
|
|
| |
|
1,815 |
100 |
2,608 |
100 |
|
| |
|
|
| |
Debt mix |
|
|
|
|
|
| |
Floating rate debt |
612 |
34 |
1,442 |
55 |
|
| |
Fixed rate debt |
1,203 |
66 |
1,166 |
45 |
|
| |
|
|
| |
|
1,815 |
100 |
2,608 |
100 |
|
| |
|
|
| |
Currency denomination of debt |
|
|
|
|
|
| |
SGD |
1,562 |
86 |
2,223 |
85 |
|
| |
USD |
176 |
11 |
339 |
13 |
|
| |
Others |
77 |
5 |
46 |
2 |
|
| |
|
|
| |
|
1,815 |
100 |
2,608 |
100 |
|
| |
|
|
| |
DEBT RATIOS |
|
|
|
|
|
| |
Interest cover ratio |
|
|
|
|
|
| |
Net profit before interest, tax, depreciation and amortisation |
508 |
|
484 |
|
|
| |
Interest on borrowings |
94 |
|
90 |
|
|
| |
Interest cover (times) |
5.4 |
|
5.4 |
|
|
| |
|
|
|
|
|
|
| |
Debt/equity ratio |
|
|
|
|
|
| |
Non-recourse project financing |
657 |
36 |
562 |
22 |
|
| |
Long term debt |
811 |
45 |
947 |
36 |
|
| |
Short term debt |
347 |
19 |
1,099 |
42 |
|
| |
|
|
| |
|
1,815 |
100 |
2,608 |
100 |
|
| |
Less : Cash and cash equivalents |
(482) |
|
(409) |
|
|
| |
Net Debt |
1,333 |
|
2,199 |
|
|
| |
|
|
|
|
|
|
| |
Net Debt excluding project financing |
772 |
|
1,777 |
|
|
| |
|
|
|
|
|
|
| |
Net Gearing excluding project financing (times) |
0.4 |
|
1.0 |
|
|
| |
Net Gearing including project financing (times) |
0.6 |
|
1.3 |
|
|
| |
|
|
|
|
|
|
| |
Cost of Funding |
|
|
|
|
|
| |
Floating |
|
2.8 |
|
3.7 |
|
| |
Fixed |
|
4.5 |
|
5.2 |
|
| |
Weighted Average Cost of Capital |
|
4.0 |
|
4.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
