Ladies and gentlemen, good morning and welcome to Sembcorp Industries' Full Year 2023 Results Presentation. A warm welcome too to viewers tuning in via the webcast. I'm Xin Jin from Group Corporate Communications and Investor Relations. Before we begin, we would like to request for all mobile phones to be turned off or switch to the silent mode, please. If you feel unwell, do approach our staff for assistance. The members of the panel for today's presentation are Group President and CEO Mr. Wong Kim Yin and Group CFO Mr. Eugene Cheng. There will be a question-and-answer session after the presentation. For viewers of the webcast, please key in your questions in the Q&A box by clicking on the raise hand icon on the webcast page. Without further delay, I will now hand over the time to Kim Yin to begin the presentation. Kim Yin, please.
Thanks, Jin. Good morning and wishing all of you a happy and prosperous Lunar New Year. Welcome to Sembcorp Industries' Full Year 2023 Results Briefing. For 2023, the group delivered a strong performance. Turnover was SGD 7 billion. This is 10% lower year-on-year, while the EBITDA was SGD 1.8 billion, 37% higher than 2022. Adjusted EBITDA was SGD 2.1 billion, an increase of 32%. Net profit before exceptional items was SGD 1 billion, representing a year-on-year increase of 38%. Exceptional items, EI for short, was SGD 2 million for 2023. Earnings per share before EI was SGD 0.571, and EPS itself was SGD 0.572. Group ROE before EI and Group ROE were both 23.8%. So in light of the group's strong results, the board is proposing a final dividend of SGD 0.08 per ordinary share for 2023.
So together with the interim dividend of SGD 0.05 paid in August, total dividend for the year will be SGD 0.13 per ordinary share, an increase from the SGD 0.12 of last year. Let me go through the key business updates. In 2023, we achieved cash flow certainty for the gas and related services segment. We were the first in the market to secure multiple long-term PPAs with our customers in Singapore. These power purchase agreements contracted with quality customers represent contracted capacity of up to 668 MW. With these long-term PPAs, 74% of our generation capacity is contracted for a period of between eight-18 years, and this enhances earnings predictability. So in total, these contracts have an average tenure of 12 years, and that transforms our merchant-centric portfolio into one that yields a stable recurring income.
As a group, contracted capacity accounted for 97% of the group's gas-fired power portfolio as at the end of 2023. For Singapore, our gas-fired portfolio was 99% contracted as at the end of 2023. And during the year, we continued to diversify our gas sources to support the energy needs of Singapore. We signed a gas sales agreement with Medco E&P Natuna to import piped natural gas from West Natuna gas fields in Indonesia. The agreement is valued at approximately $1.9 billion, and gas deliveries are expected to commence in the later part of 2024 with a tenure of four years. We have also started the construction of our new multi-utility center at Jurong Island. This facility will include a new 600 MW hydrogen-ready combined cycle power plant, and it is expected to be fully operational by 2026. Now to renewables.
We achieved significant progress and very strong momentum in renewables growth. Since the end of 2022, we have added a total of 4,000 MW of capacity through acquisitions and organic growth across our key markets of China, India, and Southeast Asia. This brings the group's total gross renewables capacity to 13.8 GW. In China, we grew organically by leveraging our partnership platforms. We also acquired brownfield projects to deepen our presence in the market. Year-on-year, capacity increased 3,000 MW in 2023. In India, portfolio expansion was driven by both greenfield and brownfield project additions. The acquisition of Leap Green Energy, 228 MW operational wind assets portfolio, was completed earlier this month. We also secured 750 MW of greenfield projects from competitive bidding in December and January. Our Southeast Asia renewables portfolio has surpassed the 1,000 MW capacity mark.
Notably, we were awarded Singapore's largest solar project of 117 MW peak by JTC. We also signed an agreement to acquire a 245 MW portfolio of operational wind, solar, and hydro assets from Gelex Group in Vietnam. The transaction is expected to close within the first half of this year. In 2023, the urban business registered higher land sales at 248 hectares compared to 172 hectares in 2022. The increase mainly came from industrial land sales in Indonesia and Vietnam. However, earnings declined year-on-year as commercial and residential land sales and handover of residential units in Vietnam were lower. Commercial and residential sales typically command higher margins compared to industrial land sales. During the year, we continue to build up our land bank with the award of three new investment licenses in Vietnam, adding a total of 1,290 hectares to our land bank.
We believe strong market potential remains in Vietnam and Indonesia from the expansion of regional supply chains. The volume of water treated in our water business remains stable. Excluding the one-off termination fee received from a customer of the water business in China in 2022, 2023 earnings of our water business improved on cost savings. The waste management business in Singapore saw a 25% increase in its collection of recyclables in 2023. This is a result of our strategic partnerships and initiatives which are aimed at promoting more recycling. During our Investor Day 2023 in November, we shared our refreshed strategy and targets. This is a snapshot of our progress against those targets. With multiple long-term power purchase agreements secured, our gas portfolio is now significantly contracted.
This deliberate strategy on our part is aimed at ensuring a robust earnings and cash flow to support our renewables growth moving forward. In May 2021, we set a target to achieve 10 GW of gross installed renewables capacity by 2025, so gross installed renewables. And we are very close to this target with 9.8 GW of gross installed renewables capacity at this point in time. We currently see strong momentum in our renewables growth, as mentioned just now, and we'll focus our effort on achieving our refreshed target of 25 GW by 2028. We have achieved also our 2025 emissions intensity target of 0.4 tons of CO2 equivalent per megawatt-hour, and we are working towards our new target of 0.15 tons of CO2 equivalent per megawatt-hour to be achieved by 2028.
To drive growth beyond 2028, we must continue to advance our decarbonization pathways, and these are some of the new initiatives that have a longer-term horizon. This includes the origination of low-carbon electricity through regional power imports, low-carbon feedstock, and low-carbon technologies. During the year, we received conditional approval to import 1.2 GW of low-carbon electricity from Vietnam to Singapore. This is the largest import license issued by the Energy Market Authority. We are also in exclusive discussions to import 1,000 MW of low-carbon electricity from Sarawak. These imports will enable our customers to have greater access to green energy in the long run. We have also signed agreements with strategic partners to pursue opportunities in the production of low-carbon feedstock.
We are collaborating with Sojitz Corporation and Kyushu Electric Power, both from Japan, to pursue potential opportunities for the production of green ammonia in India for export into Japan. In Singapore, we have been shortlisted as one of six candidates by the Energy Market Authority to submit proposals for low or zero-carbon ammonia solution for power generation and bunkering on Jurong Island. In addition, we have signed a joint development study agreement with PT PLN (Persero) to assess the feasibility of green hydrogen production in Indonesia for export to Singapore, as well as an MOU with Gentari of Malaysia to export the development of hydrogen production facilities and transportation of hydrogen from Malaysia to Singapore. As we continue to operate our gas-fired plants efficiently to support the energy transition, we are also exploring low-carbon technologies to decarbonize our assets.
In October 2023, we signed an MOU with IHI Corporation and GE Vernova's gas-powered business to jointly explore the retrofitting of our existing Sakra Power Plant in Singapore with ammonia firing capabilities. And finally, GoNetZero, our carbon management business, has secured over 40 multinational clients across various industries, and these include OCBC, Razer, and UBS. During the year, it sold more than 2 million tons of carbon credits and registered a nine-fold increase in renewable energy certificate sales to 1.8 million units. So overall, 2023 was marked by continued strong momentum in the renewables business and good progress against targets that we have set out. We are encouraged by the strong performance in 2023, and we believe Sembcorp is well-positioned to navigate the energy transition and sustainable development. Eugene will now take us through the details of our financial review. Thank you.
Thank you, Kim Yin. I just want to wish everyone indeed a very happy New Year, and it's my privilege to be sharing more details in relation to our financial performance for the financial year ended 2023. From a performance standpoint, this is a little bit of a watershed year for Sembcorp Industries, for indeed we have achieved a net profit before exceptional items that could be seen as the highest that we have ever achieved in the operating history of Sembcorp Industries.
So when we go into a little more details in relation to the numbers, as Kim Yin has mentioned earlier on, our turnover declined approximately 10%, largely as a result of lower gas as well as power prices in the gas and related services segment. Now, I think one of these key elements of turnover is that some of our gas sales, particularly in Singapore, is indexed to HSFO.
The HSFO index has come off in 2023, and we saw that phenomenon take place in the first half of 2023. But you have also heard me mention that in our gas contracts, the margins are actually locked in, right, in an absolute dollar standpoint. So the earnings and the margins that come forth from the gas sales are essentially not as impacted. So what you have seen is actually overall still a growth in our EBITDA, right, realizing higher margins. So from an EBITDA standpoint, we grew 37% from SGD 1.3 billion in FY 2022 to SGD 1.8 billion, close to SGD 1.8 billion this current year. And it's really driven by improvements in the gas and related services, as well as in the Renewables segment, as we continue to see new operating capacity come into the portfolio as we complete our acquisitions as well as our projects.
Now, share of results of associates and JVs net of tax increased by about 6% from SGD 248 million to SGD 264 million. From a renewables standpoint, we did see a meaningful contribution coming through from the China portfolio, right, annualized contribution from acquisitions that were completed in 2022, as well as seeing the Hunan Xingling as well as the Jingneng portfolio contributing. Now, this has been offset by a decline in performance in the urban portfolio, in the integrated urban solution segment, where, as Kim Yin has mentioned, although we have seen higher land sales in Indonesia, but we did see a slower C&I and RESI sales and also a deferral of some of the land sales into the first quarter of this year. So while Indonesia has seen higher land sales, but from an average selling price perspective, Indonesia still has a slightly lower average selling price.
So all in all, taking into account those impacts, our share of results of Associates and JVs increased by about 6% to SGD 264 million. So all in, our adjusted EBITDA grew by 32% from about SGD 1.6 billion in FY 2022 to just above SGD 2 billion in FY 2023. And that translates down to our net profit before exceptional items of just over SGD 1 billion for FY 2023, representing a 38% increase over a similar number from a continuing operations standpoint from last year. Now, in a discontinued operation in FY 2023, we did book a loss of disposal of SEIL of SGD 78 million, which was guided at the end of 2022. And this is a result of the movement in our foreign currency translation reserve between signing of the transaction and the closing of the transaction in January of 2023 that saw the SGD 78 million loss come through.
So all in, when we look at our earnings per share before extraordinary items, it turned in SGD 0.571, and ROE before extraordinary items is 23.8% for FY 2023. Moving on to the next slide. Now, I will just touch on this very quickly because from a turnover perspective, I probably laid the ground earlier on. The gas and related services saw a decline, again, as a result of lower gas sales prices in Singapore and power prices in the U.K. Now, for the Renewables segment, it grew 40% and as expected, but we saw the annualized contribution from acquisitions completed in 2022 as well as the new projects and acquisitions that came through in 2023. Integrated urban solutions revenue is largely a flattish or down slightly. And in the integrated urban solutions, the revenues are more contributed by the waste as well as the water segments.
The slight decline is a result of us losing a public waste collection contract in our waste management business, which was guided towards the end of 2022. Decarbonization solutions, you would see that revenues grew from SGD 3 million in FY 2022 to SGD 16 million. And this revenue is really driven by our GoNetZero, which Xin Jin and Kim have done very well in ramping up our sale of carbon credits and solutions. In terms of other businesses, revenues increased by 37% from SGD 328 million to SGD 448 million. Now, in other businesses, it comprises largely two businesses. Our Singapore main business, which is flattish in revenue and earnings performance. And the other business in our other businesses segment is our specialized construction business that deals with construction in relation to government contracts.
So what has happened is that over the past year, the order book for that business has grown somewhat, resulting in higher revenues and earnings achieved in the other businesses segment. So all in, that resulted in our total turnover for FY 2023 at SGD 7 billion, a slight decline from FY 2022. More importantly, from a net profit, which is a contribution to the bottom line standpoint, right, our gas and related services business turned in SGD 809 million for FY 2023, which is 30% higher than what we have achieved in FY 2022 of SGD 622 million. So to characterise the gas and related services, if you have recalled, in the first half of FY 2023, the gas and related services segment turned in at SGD 435 million in terms of a net profit.
Though at that point in time, I did guide it that as we go into the second half of FY 2023, what's going to happen is that our portfolio will be increasingly comprising of contracted and very long-term contracted positions for our CCGTs. And you have also heard me guide it that approximately we do expect that the kind of peakish pool gains that we achieved in the second quarter of FY 2023 to be roughly in a SGD 60 million region. So I guess if you compare the two halves and do the math and yeah, so that was essentially how it turned out, right? Now, for the Renewables segment, group net profit grew from SGD 140 million in FY 2022 by 42% to SGD 200 million in FY 2023, again, in line with our completion of our acquisitions and also continued growth in our operating capacity in that segment.
The integrated urban solutions segment, also as highlighted earlier on, declined by about 19% from SGD 150 million that was achieved in FY 2022 to SGD 121 million in FY 2023. There was a decline in earnings of the urban division. That was driven, as mentioned earlier on, by C&I RESI sales that were slower in Vietnam, as well as a delay of land sales into the first quarter of 2024. In addition to that, you also saw the loss of, although it's not a very big earnings impact, one public cleaning division contract in the waste management business. Now, also to mention, if you recall in FY 2022, under the integrated urban solutions, there was a one-off income close to the tune of about SGD 20 million that resulted in the settlement of our NJGC litigation.
That SGD 20 million obviously is also not in the current year's FY 2023 earnings as well. So that overall contributed to the roughly SGD 30 million in decline in the integrated urban solutions segment. Now, for decarbonization solutions, this is the new segment that we've called out after our November Investor Day, where this will be the segment that focuses on originating power imports as well as low-carbon energy into Singapore, looking at originating green hydrogen as well as ammonia projects, as well as looking at offtaking that in Singapore. And the third element is GoNetZero. So for FY 2023, the loss on a cost investment in a segment is SGD 13 million, right? As you can see, GoNetZero contributed part of it as a result of building up the necessary platform. And you can see that coming through in a significant growth in sales.
The other aspect of it is also a continued development cost that is invested in our power import projects as well as in our green hydrogen projects. As guided in Investor Day, you would expect this segment to have near-term cost investments, but we do still expect this segment to turn positive in net profit contribution by 2028. In the other business segment, we did see a growth in net profit, and as mentioned earlier on, driven by higher revenues as well as order book growth realized in our specialised construction segment. Now, from a corporate cost perspective, we took efforts to split between interest costs as well as others, which represents more the gross corporate cost that is incurred so that you would really be able to see the difference.
So interest costs, which is in relation to corporate funding for the acquisitions and projects that came through in 2022, annualized for 2023, as well as for the projects that were and acquisitions that were completed in 2023, resulted in a roughly 93% growth in increase in the interest costs. Embedded in that also is a slight increase as a result of base rates as we managed the roughly 25%-30% portion of the floating rate exposure of the portfolio. Now, under the others, which represents the across corporate cost, it looks like it has declined by 16% from SGD 103 million to SGD 87 million. One of the reasons for that is because when we review our tax provisions, we had to release tax provisions that were held as we are out of the time bar period of seven years, which is typically the lookback period for IRAS.
So that write-back of a tax provision is approximately about close to SGD 20 million. So when you adjust for that, our gross corporate costs did increase slightly to about between SGD 110 million-SGD 114 million. And a lot of it is driven by continued investment in capabilities carried in the corporate level. And for the DPN income, we turned in SGD 133 million, but this is really split into two portions. The actual interest income that is recognized for the year was SGD 179 million, but we did book a SGD 46 million of FX revaluation loss as a result of depreciation of the Indian rupee. Now, just to be clear, this SGD 46 million of FX revaluation loss that was booked is non-cash in nature. And it really depends at the end of 31st December where the Indian rupee rests versus the Indian rupee as of 31st December of 2023.
It is non-cash in nature, and movements of that would largely be in accordance to how the rupee fluctuates. But I guess when we look back in FY 2023, the movement of a 46% loss implied a depreciation of the rupee of about 2.5%, right? And if you have heard me mention, it does cost in terms of forward points, when we take a two-year forward view, close to 4%-4.5% to hedge the Indian rupee. So all in all, on a net basis, it was probably a better outcome that the actual hedge cost was not incurred. So looking forward this year, we do, while it's anybody's guess on how the rupee will perform, but as we continue to monitor expected forecasts of the rupee's performance in FY 2024, it ranges from maximum downside of between 2%-2.5%, right?
Though we know that in long-term devaluation terms, it probably trends towards 4%. So that's probably the maximum downside. There were forecasts that suggest that the rupee could appreciate by 0.5% against the Singapore dollar. When we look at that and against the continued forward hedging costs about 4%-4.5%, we think it is probably more sensible to continue to monitor the FX rates in relation to the DPN note. Taking all of that into account, net profit before exceptional items, it's just over SGD 1 billion as highlighted earlier on. Okay. Now, this slide is basically a waterfall of bridging the earnings from 2022 to 2023. I probably won't touch on it because a lot of it I have went through in detail in the previous slide. We move on to the next slide.
So looking at our group ROE, strong ROE performance in FY 2023, the gas and related services ROE returned in 40.7%. Of course, in Investor Day, I did guide it that we will be reinvesting in a new hydrogen-ready machines that are coming through. And so you would expect the longer-term ROE of this segment to normalize. For renewables, we continue to see strong and healthy ROEs, realizing 11% in terms of ROE performance for FY 2023. Now, for the ROE of the Renewables segment, we did see a couple of Chinese acquisitions completed in December, right, which was the 100 MW Envision portfolio and also a slightly smaller portfolio from Sungrow. So if we analyze that performance on a full-year basis, ROEs before exceptional items for the renewables would be closer to 11.7%. So all in all, a good performance in the Renewables segment.
For the integrated urban solutions, ROEs that we turn out for FY 2023 is 6.7%, declined from FY 2022, and as I highlighted earlier on, essentially for all the business reasons that contributed to the decline in the net profit before exceptional items of the integrated urban solution segment. Now, if we move on to the next slide. So when we look at our investments and CapEx that took place in FY 2023, right, so we had seen about just over SGD 200 million of investments in our gas and related services and the meaningful increment from FY 2022 and years before. And as you know, we are starting the construction of the 600 MW hydrogen-ready combined cycle power plant in Jurong Island as we have announced earlier in 2023. So of course, we have started incurring the capital expenditure related to that hydrogen-ready CCGT investment in Singapore.
For the Renewables segment, we did see about SGD 595 million of capital expenditure investments, basically as we continue to build out the contracted portion of our portfolio under construction. We saw SGD 710 million of equity-related investments in our acquisitions activities. We saw a small SGD 40 million investment in the integrated urban solutions. Moving to the group free cash flow. From a cash flow perspective, our group free cash flow continued to be strong, right? From a cash flow from operating activity standpoint, we turned it about close to SGD 1.5 billion. You will imagine that that has probably come down slightly relative to FY 2022 because in FY 2022, the changes in working capital captures a lot of a one-time effect where our India receivables got converted into the equal monthly installment payments.
But in any case, FY 2023, cash flow from operating activities was still strong at SGD 1.5 billion. Now, what is different between FY 2023 and FY 2022 is that the DPN receipts of SGD 355 million came through. So this SGD 355 million could largely be broken into about SGD 179 million for the interest repayment and the remaining for principal repayment. We would expect another tranche of principal repayment to come through sometime towards the end of this month. And the reason why that wasn't captured in 31st December because we understand that there was a certain upstreaming of cash that has to take place after the 31st December quarter end for the coal plant in operation in India. So all in all, we are quite pleased to see that we are seeing strong cash receipts from the deferred payment note. So all in before we move on.
So all in, when we adjust back our expansionary CapEx and equity investments, our free cash flow for FY 2023 is close to SGD 2 billion, which is available for expansionary CapEx as well as shareholder distributions and capital management activities. In terms of our group borrowings, our gross debt as of 31st of December increased slightly to the tune of about SGD 200 million over 31st December of 2022. Now, actually, 2023 was a year in which we were very focused on capital management where we were focused on releasing trapped cash, particularly across India as well in China, right, and to use freed-up cash for the purpose of investment and also managing debt. And the reason, if you ever recall what I've mentioned in our half-year earnings announcement, is because given the higher interest rate environment, the cost of holding cash on balance sheet is expensive.
So essentially, what you would see, although the gross debt appeared to have increased by SGD 200 million, what really happened was we actually had about SGD 416 million of net debt paydown, okay, if you look in the cash flow statement. But the increment of SGD 200 million was simply because this was offset by consolidating close to SGD 616 million of debt as a result of our acquisitions of Vector Green as well as the two Chinese portfolios that were acquired towards the end of December, right? You can find that in the SGXNet. And if you want specific pages, I'm happy to point out to you later on. So as a result of that, what I want to point out is that we are quite focused on managing our capital. And actually, we have been using excess cash to manage down our existing debt.
It looks like it has increased simply because of consolidation of debt from the acquisitions that we have made. But in any case, our total equity also increased to SGD 4.8 billion. And our net debt, taking into account of our cash and equivalents, increased to about SGD 6.5 billion relative to SGD 5.8 billion on 31st December of 2022. But taking into account also our increasingly strong as well as contracted EBITDA positions, our leverage ratio, right, which is essentially our balance sheet position, has improved quite drastically. In essence, net debt-to-EBITDA has declined by 4.4 x as of 31st December of 2022 to 3.6 x. And our net debt to adjusted EBITDA has declined from 3.7x to 3.2 x. And from a coverage ratio standpoint, our EBITDA to interest coverage ratios improved from 4.2 to 4.4.
Our adjusted EBITDA to interest ratio still remains fairly healthy at 5x, so signifying that our financial position has improved markedly even in the past financial year. On this particular slide, it shows the debt maturity profile. I think over the past three years, we have taken quite a lot of efforts to term out our debt and also making sure that we are reducing reliance on more expensive and cash-restrictive project finance loans to corporate and more green and sustainability-linked borrowings. Essentially, that is the debt maturity profile. Now, I just want to point out the refinancings that we are targeting to do within the next one year. Looks like there is SGD 1.3 billion of that, okay? Essentially, out of that SGD 1.3 billion, about SGD 260 million of that is really project finance loans and working capital at the project finance level.
So that would ultimately be taken care of by cash flows at the project level. So approximately SGD 1 billion of debt facilities remain to be refinanced. Now, of that SGD 1 billion of facilities, SGD 700 million of that has already been secured. Credit-approved term sheets have been secured from my very supportive banking partners on this side of the room. So thank you. You know who you are. And in various stages of documentation. Now, I had a question in relation to, "Oh, these refinancings, will it result in a 50 basis points increase in our weighted average cost of debt?" I mean, just to give you a sense on where we think that the refinancing costs for this SGD 700 million would turn out, I mean, right now, from a margins perspective, they are probably going to be just under 100 basis points.
Given that SORA is in approximately 3.5%-3.6% now, you would see that the expected all-in cost of refinancing is actually around 4.4%-4.5%. So it's unlikely that just from this refinancing, it's going to drive a 50 basis points increase in our weighted average cost of debt. Of course, that will be balanced against continued debt financings that we will manage for the purpose of our growth activities. Now, of the SGD 1 billion, I managed SGD 700 million of secured term facilities. Now, the remaining SGD 300 million, we would be monitoring because we will have cash flows coming through. So the remaining SGD 300 million, we will be managing between cash that is going to be coming in as well as our revolving credit facilities, of which we have very ample secured RCF facilities to deal with it.
So in short, the SGD 1.3 billion refinancing is essentially already taken care of prior to the end of the year. So the next slide, moving on. This is basically our group liquidity positions. So I guess the key point to highlight is that as of 31st December 2023, our unutilised committed RCF still stands at approximately SGD 2.5 billion, which is basically essentially an ample ready-to-be-drawn-on-demand liquidity that we have. So basically, a good position to underpin our continued growth, particularly in the Renewables segment. So second last slide, which is the outlook statement that we will be putting out in relation to our view of prospects in 2024.
Essentially, the group has performed well in 2023, and we all know that it's underpinned by the strong contribution of the gas and related services segment, which is achieved on the back of better performance in the Singapore power market as well as seeing earnings growth in the Renewables segment as the projects and operating capacities come online. The earnings of the gas and related segment are expected to remain robust throughout 2024, and that's really underpinned by our significantly contracted position, as Kim Yin has mentioned. One thing to note is that because we are contracted very long now, 74% of that is more than five years, actually 18 years.
In 2024, we would be planning a fairly major maintenance in one of the units in Singapore so that we can ensure that there's continued efficiency and high reliability of our asset given the fact that we are contracted so long. Of course, as always guided, the income contribution from our Phu My 3 power plant in Vietnam will also cease at the end of February. The Renewables segment is also expected to continue to perform well as more greenfield projects commission and brownfield acquisitions that are completed progressively in the course of the year. The outlook of the integrated urban solution segment is expected to remain stable. Now, we do also want to highlight that macroeconomic uncertainty still remains, and there could be potential policy changes, right, that could affect the global economies and also the markets that we're in.
This could result in a risk that comes through from further escalations in geopolitical tensions, and that could ultimately impact our business performance. But all in all, we continue to remain well positioned to navigate the path of energy transition and to grow our renewables portfolio and the execution of our brown-to-energy transition strategy as highlighted on Investor Day last year. Now, moving on to the last slide, I just want to give a little more guidance in relation to the two developments that I highlighted earlier on. Essentially, the Phu My 3 BOT power plant will come to the end of its operations in February of 2024. I mean, just to give you a sense, historically, this plant has generated a stable earnings of about SGD 10 million to us.
So clearly, with this plant reaching the end of its operations, you would expect that would be the quantum of earnings that will impact us this year. Now, in terms of the major maintenance for the Singapore cogen plants, we expect it to be approximately two months or 60 days in the first half of 2024. Now, this is how I would think about it in terms of how it will potentially impact the gas and related services segment. In the second half of 2023, we achieved about SGD 374 million. And as you have always certainly guided, that is off the back of a highly contracted position that will carry through into 2024 and beyond. Now, of that, the SGD 374 million achieved in the second half, the Singapore gas and related business comprises between 80%-85% of that, okay?
Now, essentially, the coal generation plants that will be impacted in this major maintenance is roughly two-thirds of the capacity in that two months, okay? It's roughly two-thirds capacity or roughly two months of that Singapore earnings. So if you think through that and you work through the math of that, then you would be able to come to an approximate number of the impact on our earnings this year, okay? So again, to repeat, we did about SGD 374 million in the second half of 2023. We do expect that to carry through. Approximately 80%-85% of that in Singapore. The coal generation plants that would be shut down for about two months comprises about two-thirds of the generation capacity, okay? So I think that ends my discussion on the financial results, and I think we are open for any Q&As.
Thank you, Kim Yin and Eugene. We've now come to our Q&A session. Please raise your hand if you have a question, and the microphone will be brought over to you. Please state your name as well as the organisation which you represent. For viewers of the webcast, you can key in your questions in the Q&A box by clicking on the raise hand icon on the webcast page, and we'll address the questions as well during the session. Thank you. Rahul?
Thank you. Hi, Rahul Bhatia from HSBC. Just continuing on the last point that you mentioned about the SG plant, right? Given now you have a contracted capacity, I assume you would be still liable to supply power during those two months. So how does it work? I mean, you'll be buying it from someone else and then supplying? If that's the case, then you would be still getting the fixed dollar margin, right?
Yeah. I think in relation to that, we will have to incur the cost to buy the necessary CFDs for the purpose of covering the contract positions. So it's a probability game. You might still make profit during. I think it depends on whether the CFD would be in the money or not, right? So I think from the overall impact perspective, we choose to take it as the CFD would largely be neutral and to look at it from the effects of the cost of the shutdown.
Yeah. And second, about Myanmar operations, I noticed that you still took some credit losses in second half 2023, even though it was significantly lower than second half 2022. Could you update us the situation there and how much is the exposure today as of end of 2023?
Okay. So in relation to the Myanmar situation, you will recall that as of the end of FY 2022, we took a fairly significant ECL expected credit loss provision, right, in the region of about SGD 83 million. Now, as we close December 2023, as the accounting rules are required, we are expected to, again, review the risk environment in relation to the Myanmar power plant. Now, we came to the view that the risk is probably slightly escalated because, as you would imagine, towards the fourth quarter of last year, there were reported certain altercations that took place in the Myingyan province, okay? So essentially, local rebel forces were having skirmishes with the ruling party. And as a result, that is in the province of where the plant sits. So we would have to take the view that there is an increase in the risk profile.
So as a result, going through, looking at the potential probability of default as well as loss given default rates, that has resulted in an additional SGD 18 million or so of a provision. Now, in terms of your question of how much exposure is still there, let me get back to you on that, Rahul.
Next question, please. Mayank? Thank you.
Hi, Mayank from Morgan Stanley. I think, Kim Yin, first question for you, I suppose. The Singapore government has announced the SGD 5 billion new energy fund. Can you just talk us through how does it affect Sembcorp on the more medium term?
If you think about it, it is by the way, thanks, Mayank. Good to see you again, and of course, many of you. The Singapore government, as part of the budget, DPM Lawrence Wong, and he was EMA Chief some years ago, so he knows the energy markets very well. It's aimed at helping to decarbonize, right? And I think, if you read carefully, it also aimed at infrastructure. Yeah? So what that means is that you connect the dots with all the previous announcements. The previous announcements are that we got four switches. We're going to have to continue to rely on gas. We'll max out our solar. We'll try to bring in regional imports, and then we will have technology solutions, right? So if you think about it, the SGD 5 billion will be aimed at providing infrastructure that would facilitate or to support the four switches, right?
So I can imagine now that I should start by saying that they haven't announced any details, and I'm none the wiser than any one of you at the table. Maybe some of you have exclusive interviews with DPM or EMA Chief. You have better information, but I first disclaim that I do not have. I'm attempting to guess, right? So they had four switches, and they said, "I got $5 billion aimed at infrastructure. Long term, we want to decarbonize." So it must be I suspect it could be used directed at providing infrastructure that will facilitate the last two switches, right? Because solar today, putting it up into the rooftops and the rest of Singapore is already very commercially viable and very competitive process, actually, right? And gas-fired, we see Sembcorp building a plant, Keppel announcing a plant, and then now even YTL announcing a plant.
That shouldn't be necessary. I would guess that it will be aimed at providing infrastructure that will support the third switch, which is regional import, and perhaps also to support developing low-carbon feedstock solutions, which I think in my presentation just now, I also alluded to. For us, we are positioning ourselves in low-carbon regional imports, electrons, and then low-carbon feedstock as well as carbon trading. We hope to be able to benefit from it, right? Let's say, for instance, if they directed that money at providing transmission infrastructure, right, then that could actually help us bring in the electrons into Singapore without having the commercial parties investing heavily a lot of capital into transmission infrastructure. I'm guessing, right? I'm guessing. I'm just attempting to connect the dots, but I'm none the wiser.
But net-net, it is a very good sign that the government is taking the initiative and setting aside real money, right? Whether or not it is enough depends on how and the structure and where it's directed at. I don't know whether I answered your question. You probably have already gotten a much clearer picture in your head, but I mean, Sembcorp cannot say we don't have a view on this, having been a Singaporean player and having had the budget in our faces just a few days ago. So you have to put up with my ambiguity there.
So I think from your perspective, if I kind of look at now capital allocation for 2024, you have pretty much a clearer plan on how much you'll be spending on the cogen side as well as on the renewable side. So can you just give us a bit of a guidance in terms of what would be your CapEx plan for 2024? What's kind of all black and white right now? Obviously, it'll be acquisitions and all that will build on that, but can you just give us a bit of a sense of how that breakdown will look like on investments for 2024?
Yeah. I think in general, Mayank, I've given the five-year capital allocation, right, from 2024 all the way through 2028. I think a broad guidance will be just look at it from a straight-line perspective, okay, for the purpose of modeling.
And I think, Eugene, to the other question, thank you for addressing the interest cost point. Can you just give us a sense of the SGD 700-odd million that's there at the corporate level in terms of financing that you've already done at 100 basis points above SORA? How much is it in absolute terms in terms of an increase? And then there is another one refinancing coming in one-two years. So how are you thinking about those terms as well right now? Is there some clarity yet, or you want to kind of ride through as the rate cycle evolves?
Okay. So for the 700, I've really guided earlier on, right? The margins are probably just shy of 100 basis, just below 100 basis points. And given where SORA is, you kind of will be able to get a sense on where that will come out in terms of interest cost.
Now, of course, the refinancings two years out, we continue to evaluate because where we are now in the rate cycle is it's still volatile, right? Because towards the second half of 2023, there's still continued the earlier part of second half of 2023, there continue to be beliefs that the rate hikes will happen. Towards the end of 2023 and as we come across over into 2024, then confidence of Fed accelerating rate hikes, we see expectations of up to five rate hikes sorry, rate cuts, six rate cuts in 2024 expected. And before you know it, oh, looking at the inflation data, not too great.
Fed is now turning back into neutral and kind of wondering, "Okay, should we hike rates more, right, hike rates more, or what should we do?" I think given the volatility, we are probably where I stand right now, I'm probably not so forthcoming in trying to commit a two-year ahead refinancing on fixed rates. We'll prefer to monitor the market because given where the rate cycle is right now, in any case, I would like to think that the Fed has really hiked fairly aggressively in the last 18 months or so. That's where the rates are right now, hopefully, it will be peakish, and then it will be a situation of just how long it will take for them to bring down the rates.
Of course, the most recent inflation data may suggest that they may continue to think about rate hikes, but it's really off the back of this volatility in rates that we would continue to monitor the markets and to see how we would approach the refinancing for debt that is due two years out.
And in any case, Eugene has been repeating for many times, and you well know it, but for the benefit of some others who may not be familiar, we have got maybe 70%-75% of our debt portfolio, they are in fixed rates already. So with that, then we are actually in a very good position today. So do we go out there and do we feel we have gone too ahead just in case they hike the rate another two rounds, another 50 basis points?
The hit that will come to us on that part that is floating is no longer so worrying, right, as opposed to a few years ago, we were at 30%. So that really positions us in a very good position. So the issue really is rates moving forward as well as availability of capital. So that's why just now, Eugene was taking a little bit of time in explaining that we actually have got lined up the capital already. Then the issue really is what is the rates. And today, if interest rate goes up 1%, everything else being equal, for a full year, it will impact us by about SGD 20 million -SGD 21 million. That's about the position.
Yeah. Boss, just to clarify, the SGD 700 million is not just lined up the capital. The rates also determine really.
Yeah. So, to the point, if you look at it two years out, it's only at 400 out there, and three years out is another 950. So no issues about availability, okay? So that's the first thing. Then the second thing, in terms of the rates, how bad is it going to bother us? Do we have to? Do we feel compelled to quickly go out there and do something? We are not. If we went out there and say, "Look, let's lock in the rates now," somebody might say we are foolish. So, I can't say that we are wise to know what to do, but I think we are in a good position to maneuver when there is clarity. There's better clarity. We are in a better position than most, if I have to put it that way.
I think the last question from my end, can you just talk about the performance on UKPR as well as the situation on receivables for both India and China?
Okay. So for UKPR, I think you have seen the slide that I've mentioned earlier on in the gas and related segment, we have seen power prices in U.K. come off, right? And I would say that for UKPR, 2023 was a down year relative to 2022, and you can really see that in the FFR rates as well as ancillary services rates in the U.K. Now, what is happening in 2023 really is we see a lot less volatility and scarcity events in the U.K. national grid power system. I think in addition to that, also, as we understand the situation to be, the government was actually more focused on ramping up baseload than relying on renewables.
So the combination of that resulted in less volatility in the system, so that also reduced prices and demand for FFR services. So all in all, for the UKPR business, we did see a down year in 2023 relative to 2022. Now, on the other couple of questions, sorry.
Before we move on, Eugene, you can prepare for the on U.K., so the external environment is one factor. The other thing that we, of course, what is it that we have been doing? The availability of the flex portfolio in 2023 is actually a marked improvement over 2022. So if the market was there, I suspect we were done better than the previous year, right? But the volatility wasn't there even though we were available.
So I think this also brings out the other point, which is why we are so adamant about wanting to remove merchant risk from our portfolio, right? So this part about U.K. remains exposed to merchant, right? But our Singapore business, where most of our earnings and cash flows are coming from, we have locked it in. So it really brings out this point in my mind. Can you imagine if we continue to have that type of exposure in Singapore? One year, you will see SGD 200 million of contribution. Next year, you'll see SGD 600 million. I don't know how I can explain to you in a meaningful and coherent way next year's projections. But now, with where we are now, even though U.K. is still very exposed, but we know it is something that we're not happy with.
We're doing what we can in building up the availability and the operational so-called standards. But in the meantime, our earnings base and our cash flow base, we are not, to be very frank, not relying on that anymore.
Sorry, Mayank. I think I missed your next two questions. Do you mind I repeat?
Receivables in India and China.
So let's touch on India first. I think India continues to be in a good position. The thing is that with the commitment to equal monthly installment payments, even on the renewable side of things, the receivables that are contracted to the REIAs, right, which is SECIs and the national REIAs, that's not an issue at all, right? I think those receivables that are being contracted to the Discoms, they have also signed up and converted them into the equal monthly installment plan.
We have seen past receivables coming down quite significantly. Now, on China, there will be two considerations, right? Because from a receivable standpoint, there are really two components. The receivables due to the on-grid tariff. So that's not an issue, right? That has been paid on time and nothing is built up. Now, then, of course, the other element would be receivables that are in relation to the subsidies. So in relation to the subsidy receivables, you would have recalled that last year, we did update the market to say that there is an ongoing subsidy audit that is taking place in China. As we've gone through the audit and as we have reviewed our own portfolio, where we stand right now, given the opinions as well as our own thorough assessment of the portfolio, we are confident that the subsidy receivables will be collectible.
Now, of course, the national NRE is going through the process of clearing the projects through the subsidy audits. Now, as of now, as of today, we understand that about 25% or so of the projects have been cleared through the audit, and they'll continue to work through the audit. So the subsidy receivables, where it stands right now, is still pretty sizable. But where we stand right now, based on our assessment as well as looking at it together with external consultants as well as advisors, we are confident that our projects stand in good state to clear their subsidy audit.
And the other important thing to note is that we are in no disadvantaged position relative to all the other generators, including state-owned ones, right? So we have got state-owned partners. We have got projects with state-owned partners, and we can see, right?
We are just one of the people in the queue, right? So the whole number, for us, is big, but for the entire portfolio, there's undergoing audit. It's even much bigger and includes state-owned players. And among all this, we are just one of the people in the queue. We are not being discriminated against. We are lined up. And to Eugene's point so far, when we made those acquisitions, we did our diligence, and we have certain confidence that they should qualify for the subsidies, right? So we are waiting for the outcome of the audit, and they are taking the time that they deem necessary. And it is something that we do what we can to try to encourage them as a foreign investor and also using our relationships where we could.
But I think it is something that we cannot you don't want to push too hard and rush them beyond their comfort zone. Yeah. So that's really where it's at. But the number is big.
Another question from the audience? Peggy, please.
Hi. Thanks for taking my question. Just one question from me on your assets value under your urban solutions. Do you see any risk of you having to write down further of this value looking at the current market situation? And there are some listed companies who operate in China telling us that they rather cut prices and let it go and maybe book a loss. What is your view on the current market situation right now? Thank you.
Okay. Let me comment more generically, and maybe Kim Yin also can jump in from a business standpoint. In relation to the book value of our urban business in the integrated urban solutions, I mean, whenever we close the year-end, we will do a very thorough assessment of the assets that is on the balance sheet. And we're looking at it from both the market conditions as well as corroborating it with a third-party valuer's report. So where we stand right now, it's that the book value, at least looking at where the market is trending, because when the valuation reports come through, it does take into account of the foreseeable outlook. There is no risk of debt being written off. Now, I think I also want to characterize that our urban business right now, I mean, the bulk of their investment earnings as well as exposure is really Vietnam.
We know that Vietnam continues to be a market that is in demand, particularly from the supply chain migration standpoint. Then China, probably, is meaningfully smaller than Vietnam. So all in all, the overall urban portfolio, thankfully, is not that significantly exposed to China relative to Vietnam. We also have Indonesia as another meaningfully developing and a growth market. Where the book value stands as of the year end, we assess it very thoroughly. There is no risk of it being impacted. But in terms of us looking at how we would think about the business, Kim Yin, do you have any thoughts on that?
Well, the two properties that we have out there, which we book as investment properties, SNEI and the IWH, the water hub, both of which, to Eugene's point, we make annual impairment assessment. The assessed value, there's headroom above what we have in the books. That's the more technical point. Whether or not there's risk that we will come out there and there is headroom, right? That's really what it is. Unless it comes down, never say never. If it comes down dramatically, then, of course, then your headroom gets eroded.
From an accounting perspective, you have to come out and do that. But right now, I can tell you that there is headroom. That's number one. Number two, to Eugene's point, it's a relatively small part of our portfolio in urban. The third bit is also some of the people who have to cut losses and move on; they have got pressures because they may have overexposed. That's number one. The other part that they may have pressures, they may have got cash flow issues, right?
None of which we are exposed to, right? So first is a very small part of our business. We were not counting on cash flow from this business, be it through rental or through sale, to fund our growth in the energy side or, for that matter, in the urban side. So we don't have all that pressure. So from a short answer to your unless something very bad happens in China, then we will be one of the last to suffer from this. Someone else would fall like a pack of cards well ahead of us if they are overexposed to real estate in China. We are actually not. So the exposure, I wouldn't worry about this one. I wouldn't worry about if you worry about write-down in our portfolio, I wouldn't worry about this one.
He will stop me from pointing where I would worry, but no single portfolio is so-called bulletproof, right? We have some places where we are watching very closely, where we have got bigger exposures. To Rahul's question just now, Myanmar, for instance, you have the number.
Sorry. Thanks for reminding me. I was just waiting for an opportunity. So Rahul, from a service concession receivables, we probably have about SGD 334 million. Now, today, SGD 131 million of provisions against it. So from what is still outstanding exposed, it's about SGD 200 million.
Yeah.
Okay. We'll take some questions from the web first. It's mainly related to the net profit figures for the second half. If we look at second half 2023 profit, it's about 80% of that in first half. Is there a reason for that? And is there a pattern that we see moving forward? Somewhat related to this as well, also on renewables, whereby the second half net profit is lower sequentially, first half versus second half. How should we be thinking about the earnings in this segment going forward?
Yeah. So I think I'll take both the questions because they are somewhat related, right? I'll touch on the renewables one first. I think historically, you would have seen that the pattern and distribution of our renewables portfolio earnings between first half and second half is always first half is higher and second half is lower. Because in the second half, you will capture two effects. You will have three Qs where India would go into a lower wind season. And then in the fourth quarter, China would go into a lower wind season. So it's just a natural seasonality that comes through in our renewables portfolio.
You probably have seen that this is probably the third year running when you see that seasonality. So, of course, then that answer would then feed into the first question where you say that why the second half earnings is slightly weaker than the first half. So apart from the renewables, which are seasonally typically see a weaker second half, the gas-related segment in the second half was also lower, essentially as guided in our half-year earnings that approximately SGD 60 million of the higher pool earnings that was achieved in the second quarter of 2023 potentially would be a cutoff, right, as we go into a highly contracted second half. So essentially, the combination of both two would be the reason contributing to why the second half profit is slightly lower than the first half of 2023.
Okay. And in terms of renewables, there's also a question on the percentage of the portfolio generation that is actually contracted versus merchant.
Actually, for the renewables portfolio, the bulk of it is actually contracted, right? India, China also majoritely is contracted. So the only market where it is not contracted is really out of Singapore, right, because Vietnam would be a long-term contracted as well. And even as we go forward on Indonesia, that is also a long-term PPA market. So from a renewables standpoint, probably quite a smallish part of the portfolio would be exposed. Of course, from running their business standpoint, Chiap's not here, but essentially, we would, of course, look to package that into signing a long-term green/virtual PPAs for these electrons as well. So essentially, their renewables portfolio, it's almost large, very, very significantly majoritely contracted.
Actually, the green portfolio in Singapore, you don't want to contract because it is of scarcity value. We are one of very, very few. And that's why Eugene was saying we try to package it so that then we can drive higher margin for our brown. It can then help us attract long-term contracts for our brown. Because anybody who wants green today, I'm not just going to give it to you. I say, "Look, sign me a long-term contract." Then we talk. So it is giving us that mileage and the competitive advantage. In fact, not having it contracted is a good thing for Singapore. But all the green coming back, all the renewables that we build, effectively, they are all contracted. We don't do merchant renewables. I can't think of one.
No, we don't do merchant renewables.
No. Batteries, of course, in the U.K., you are exposed.
That's why I say.
That's the one place if you sometimes, if you consider that part of it as part of the renewables portfolio, yes, the part in the U.K. is exposed. Yeah. I don't know where to answer that question.
Any other questions from the floor? Siew Khee.
Hi, Siew Khee from CGS. I have three questions. First one was you mentioned that for RE, the ROE would have been was it 11.7% if you had included the acquisitions.
Full-year contribution of the China portfolios that was completed in December.
Okay. So only the Chinese one, right?
Yes.
Okay. So that would mean we can use that as a trend for 2024.
Essentially, yes, that's right.
Thanks. And also for the carbon cost, now you've singled it out, is that annual run rate that we should be looking at, or are you continuing to spend even more?
I think for the decarbonization solution segment, it's going to be activity-driven, right, as we look to originate the projects. But as you have heard me highlight during investor day, I think while we see this as a critical element to build out for our portfolio beyond 2028, we would look to contain our both from a capital and cost investments and to be very, very tight and efficient on it. So I think from a run rate perspective, I think what we have achieved for SGD 13 million this year is fairly representative. But of course, it will really depend on the volume of the activity that's coming through.
Thanks. And also just DPN, right? I appreciate your elaboration on hedging and the forward-looking rupee trend. So just simplistically, can I just take 95 × 2? Because I mean, for second half because second half was SGD 95 million, right, for.
For the DPN interest, right?
Correct.
Yeah, approximately, roughly that. But of course, I think what you owe to do is to look at the interest rate. So it is still running at around 9% and apply that to the opening balance because we did receive a meaningful amount of principal paydown.
So previously, you had a receivables left of about, I think, SGD 500 million, and then that was being used to actually knock off the overall DPN, the original receivables. How has that been?
Sorry.
In a minute, I'll just take this offline. Sorry.
Okay. So Siew Khee, we completed the transaction with about SGD 2 billion of the DPN book value, right, if you recall. So we ended the year about SGD 1.8 billion because of a paydown in principal that was achieved. So it's actually a good result, okay?
And then you would expect that principal also to be a paydown as we go on. So from a DPN income perspective, you would think in terms of where the interest rate is, we did guide that it's 180 basis points over your 10-year G-Sec. So right now, it still stands around 9%. And then when you apply that to your opening DPN book value, that will give you a sense of what the DPN income would be. Yeah.
Yeah. And just additional comment on that because it is running down. It is getting paid down faster, much faster than we expected. So if you go at this rate, in 10 years' time, it's gone. So we are actually quite pleased with this outcome. Yeah. And the cash flow is good.
In the meantime, all our ratios and all those things, Eugene has extra cash to go and pay down the expensive debt, can do a lot of very good things.
Yeah. I'll characterize it this way. I mean, having sold the asset and being in a position where we have to now take the role as a lender to finance the DPN, I'm personally quite pleased at the cash flow that is coming back to the group as a result of the DPN. Yeah. So a very strong cash collection, SGD 355 million in FY 2023, of which there will be more that would come through later on this month. That's simply because a result of having to declare dividends at the asset level after the 31st December unaudited financials.
So I guess what I'm trying to say is that with the DPN outcome, I'm very happy with the cash collection back to the group.
Yes.
Any other questions from the floor? Okay. I'll move to online questions. Now on the gas and related services segment, is the price for gas supply for the power generation business fixed or hedged over the supply? And in the Singapore portfolio, when you look at the contracted portion, are there any differences in terms of the contract for those contracted between zero to five years or longer?
Okay. I'll do that. Okay. So on the price for gas supply for the power generation business, it will always be hedged, okay? But how it is hedged would depend on the contract structure. S o we do have a fixed tariff contract, and that's indirectly answering question five where the fixed tariff contract, which tend to be the ones that is below five years. So for that portion of the contracts and the volume of gas that is needed to generate for those contracts, we will hedge it. We will close off the indexation.
But for the long-term PPAs, which is the ones that are more than five years, the eight to 18 years, the contract structure is such that it is on the premise of a fixed spark spread, and a gas cost is passed through, right? So on those, obviously, we will not fix the indexation because it is already naturally hedged over the life of the contract.
Okay. Another two questions. I think actually you've explained part of it, but maybe it wasn't caught by the online audience. How much of the strong gas and related services segment performance could be attributed to declining gas price? And how do you expect spark spreads to expand with declining gas price?
Yeah. I guess in relation to this, kind of explain that, right? The portion that we typically hedge the gas prices against the structure of the tariffs of our contracts. So essentially, we are quite hedged against the movement of the gas prices, which is why we can now claim that from an earnings and cash flow stability standpoint, it is a lot more visible going forward.
Okay. And the last question, what are your expectations of the impact on net profit once the Gas co begins to aggregate the supply of gas?
Our contracted position is expected to be respected, right? Singapore government do not expropriate, if I have to use that word. And that's why putting in place these contracts again is not just from insulating us from market volatility in the merchant sense, but also allowing us to have the stability and to be able to count on our own effort through these contracts, even when the Gas co comes in. In the very long run, yes, the gas supply, one would have to for the purpose of power generation, one would have to purchase through the Gas co, right? But to the extent, if we have got existing contracts, long-term contracts especially, they're already with external customers, third-party customers, Gasco will the volume coming through Gasco will not interfere with that. And I think it doesn't bother the Gasco or the government, right?
When the regulator put in place the Gas co, they are actually trying to make sure that consumers, be it commercial consumers, industrial consumers, or other consumers, they are trying to make sure that they get their supply, right? So to the extent they have already secured supply from a supplier like us, there's no reason for Gasco to not want to allow that to continue, right? So the purpose and the intent of having the Gas co really shouldn't affect what we have done and what we have put in place. So all these questions, actually, they are very good because the gas, at the end of the day, is a big part. Gas and related services segment, which is then the power and so on, especially in Singapore, is a very big part of our earnings base and our cash flow base.
So I want to take this opportunity to actually make this point. This season, I don't know whether it is obvious to everyone that our confidence level in our future earnings and cash flow is actually much stronger than last year when Eugene and I sat in front of you. Why? It manifests in the fact that we are prepared to come out and say our ordinary dividend shall be SGD 0.13 moving forward. In the past, we would say, no, no, no. It's SGD 0.08, SGD 0.05 special. Why special? Because it's special. It's not recurring. We are not confident that we can recur. So we don't want to come in here one year, SGD 0.12, one year, SGD 0.11, one year, SGD 0.05. But now, this year, we are telling you, "No special dividend. We've done well earnings." Better than last year, right?
We can argue that, "Oh, maybe we should call for a special." But this year, we're saying, "Not special, ordinary." That means what we're saying is that next year, my investors would expect us to sustain that number, if not grow it, right? So that, I think, is a very important signal. And why are we prepared to do that? Eugene has mentioned, I have mentioned, because of our confidence in our biggest earnings base, we are no longer exposed to merchant risk. We have locked in. And again, another evidence, revenue or turnover can come down materially, and yet our earnings can stay, if not increase. That tells you the strength of the contract portfolio that we have, right? So moving forward, revenue can turn over, can be up and down, but as long as we continue to deliver the megawatt hours, the earnings will be there.
This delivery is underpinned by the contract that we put in place. We are confident of our earnings and our cash flow. We can then fund our growth into our green. So the brown-to-green strategy, if your brown is one year 200, one year 600, you have to worry about where am I going to but if it's a 200-year, where am I going to how am I going to pay for my CapEx? But now, it's locked in in that sense. We have good visibility. So I want to, at this stage, if not end by emphasizing this point, I think it is a significant shift. We already signaled all that shift in the last year, right? I think this is the point where we are saying we're there, right? We're there.
We have completed that shift, not just in terms of the Singapore business, but if you think about it, moving forward, we are putting money into renewables, and all our renewables are backed by long-term contracts, right? So the entire portfolio's risk profile, I want to emphasize, at least from our perspective, the team has put in this very deliberate, very concerted effort to have shifted the risk profile of the entire portfolio from what it was when I first came to this company, right? If you remember, 2020 was what? SGD 400 million net profit of the whole group, same assets. We didn't build a new plant in Singapore, no. But how much is it contributed this year? So we knew the potential of the assets. We knew that we could take advantage of the situation of the market volatility and tightness.
But then we say, "Look, we are here for the long haul. What we want is visibility and predictability so that then we can decisively, without having to look back, move into our green portfolio." So that's really what has happened. And this season, we can tell you emphatically that we are ready. We're there, right? And that's why we said, "Okay." We had a big debate at the board, ordinary dividend versus special dividend, and we said, "Look, okay, let's come out." We're okay. Next year, we hold ourselves to delivering this stability moving forward, and we are coming out to tell you that.
Any other burning questions? If not, we've now come to the end of today's briefing. Thank you very much for joining us. Once again, a very happy Lunar New Year and wishing all of you a healthy and successful New Year ahead. Thank you.
Thank you. Thanks for coming.
Thank you. Thank you.