Two large Singapore-listed companies have been buying back shares. One is riding positive market sentiment to reach multi-year highs, the other is struggling against multi-year lows.
Sembcorp Industries, one of the better performing index stocks this past year, has helped drive its ongoing upward trend with active share buybacks, especially throughout this month.
On March 1, it acquired 808,700 shares at $3.67 each on the open market. In subsequent buybacks, Sembcorp acquired its own shares at steadily higher prices, reaching $4.09 on March 21, when it acquired 784,500 shares.
The most recent purchase was on March 22, when the utilities company acquired 1.25 million shares at $4.13 each. This brings the total number of shares bought back under the current mandate to 15.36 million, equal to 0.861% of the total share base.
While the company enjoyed a lift from higher prices of energy from conventional sources, it has been actively pushing into renewable energy space as well.
Over the past month, Sembcorp has announced a series of related ventures and deals to expand its footprint in green energy.
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Most recently, on March 13, Sembcorp announced that its joint venture with Jinko Power has been awarded a contract to build, own and operate a 500MW solar plant in Oman. The plant, set to be up and running come 2025, is backed by a 20-year power purchase agreement with the local authorities.
On March 9, GoNetZero, Sembcorp’s carbon management solutions corporate venture, launched its blockchain-powered digital platform for trading Brazil International Renewable Energy Certificates (I-REC). Ng Lay San, co-founder and head of GoNetZero, says her setup supports corporates to achieve their decarbonisation goals.
On Feb 27, Sembcorp announced a power purchase agreement with semiconductor player Micron Technology. Under terms of the 18-year agreement, Sembcorp will supply Micron with up to 450MW of power. The deal will be accretive to earnings for the current FY2023.
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On Feb 21, the company reported earnings of $848 million for FY2022 ended Dec 31, 2022, up 204% over FY2021’s $279 million. Revenue was up 21% to $9.4 billion, with growth from both its conventional and renewable energy segments.
Sembcorp plans to pay a final dividend of four cents, and a special dividend of the same amount. This will bring the total payout for FY2022 to 12 cents.
Buying from multi-year lows
Shares of land transport operator ComfortDelGro have reached new multi-year lows and the company has started buying back small amounts. On March 20, the company acquired 39,900 shares at $1.17 each on the open market. This brings back the total bought back under the current mandate to 1.12 million shares, equivalent to 0.052%.
Earlier, on March 14, the company bought back 62,300 shares at the same price.
The last time ComfortDelGro did a buyback was on Oct 10, 2022, when it acquired 62,300 shares at $1.25 each.
ComfortDelGro, which operates buses, trains and rent out taxis, is on the path of recovery from the pandemic, when commuting traffic collapsed. In FY2022 ended Dec 31, 2022, it reported earnings of $173.1 million, versus $123 million recorded for FY2021.
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However, the operator faces rising costs, especially power. To mark its 20th year as a listed company, ComfortDelGro has declared a final dividend of 1.76 cents, plus a special dividend of 2.46 cents, bringing total payout for FY2022 equivalent to a payout ratio of 70%.
