SCRPF (SCRPF) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, a very good morning to everyone joining us both in person and online. Welcome to Sembcorp Industries First Half 2026 Results Presentation. I'm in Xin Jin from Group Strategic Communications and Portfolio Management. Before we begin, may I kindly request that all mobile phones be switched off or set to silent mode. Thank you. Joining us on the panel today are our Group CEO, Mr. Wong Kim Yin; and our Group CFO, Mr. Eugene Cheng. [Operator Instructions] Without further delay, I will now hand over to Kim Yin to begin the presentation. Kim Yin, please.

Good morning. Welcome to SGI First Half '26 Results Briefing. Let me begin with the key highlights. For the first half of 2026, turnover was SGD 3.8 billion, EBITDA, SGD 768 billion, adjusted EBITDA, SGD 947 million. Underlying net profit was SGD 369 million, and this translates into earnings per share of SGD 0.207 and annualized group ROE of 13%. We completed the acquisition of Alinta in June. We are showing the pro forma financials, and this illustrates the group's earnings profile with Alinta included for the full period of the first half. On a pro forma basis, turnover would have been SGD 5.6 billion. EBITDA and adjusted EBITDA would have been SGD 1.2 billion and SGD 1.4 billion, respectively. Underlying net profit would have been SGD 558 million with earnings per share of SGD 0.314 and annualized group ROE at 19.1%. The acquisition of Alinta broadens Sembcorp's earnings base and increases the contribution from integrated platforms with recurring cash flows. So in line with our outlook for the full year, we are pleased to increase the interim dividend to SGD 0.11 per share, up from SGD 0.09 a year ago. Allow me to take you through the performance of each of the business segments. First, under Gas and Related Services. For the first half of 2026, underlying net profit for the segment was SGD 285 million. Spark spreads were lower in the first half. This was partially mitigated by our contracted portfolio. As of June 2026, 80% of Sembcorp's gas-fired generation portfolio, excluding Senoko's, is contracted for 5 years and above. Our overseas assets remain resilient. In the Middle East, our operations performed well despite ongoing geopolitical tensions. We further expanded our platform in the Middle East through the 2.6 gigawatt Taweelah C independent power project in Abu Dhabi, underpinned by a 21-year PPA and a strong contractual framework. The project will provide long-term earnings visibility and stable cash flows to our overseas portfolio. In the U.K., earnings were lower following the closure of one of our industrial customers. We are actively repositioning the Wilton site to capture new demand from data centers and digital infrastructure. Looking ahead, our 600-megawatt hydrogen-ready power plant remains on track for completion in the fourth quarter of this year. This will enhance our generation capacity and the competitiveness of our generation fleet. During the period, we also secured 150-megawatt long-term power purchase agreement with Micron, bringing our total contracted supply to the semiconductor manufacturer to 600 megawatts. In addition, we announced an agreement to acquire 20% stake in Aster Power, where Sembcorp will have -- will be the sole gas supplier to the Aster facilities. And overall, gas and related services remains well-positioned, supported by our contracted base, integrated gas and power capabilities, and growing demand from AI-related industries. The Renewables segment faced a challenging first half with underlying net profit of SGD 69 million. In China, generation hours experienced weak wind and solar resources. curtailment lower tariffs and the removal of VAT refund on onshore wind projects further impacted the segment. Our focus remains on disciplined execution and value creation within the portfolio. India remains a bright spot with renewables. We have 3.6 gigawatts of projects with high tariffs secured in the pipeline. Today, the group has a total of 6.6 gigawatts of renewable capacity under construction. As this pipeline comes into operation, it will strengthen the portfolio's earning potential and long-term value. With a sizable operating base and a strong pipeline under construction, we are now well positioned to unlock greater value from our investments in the Renewable segment. We move on to Integrated Urban Solutions. The IUS segment delivered underlying net profit of SGD 62 million in the first half of 2026. This mainly reflects the absence of contribution from SembEnviro following its divestment in March 2025, partially offset by improved performance from the water business on stronger contribution from industrial water. Our urban business continued to expand its footprint and build recurring income. In Vietnam, we secured 6 new projects, including the group's gross development land area to over 18,000 hectares across 31 projects, achieving our 2028 target well ahead of schedule. We are also growing our ready-built facilities portfolio. Gross floor area has grown from 134,000 square meters in 2023 to over 1.1 million square meters as of June 2026. This will strengthen the base for recurring income moving forward. Looking ahead, we expect a strong second half from higher land sales. In Kendal Industrial Park, Indonesia, 40 hectares of land sales have already been secured and are expected to be recognized upon handover in the later part of the year. Within the water business, we continue to sharpen our portfolio and focus on areas where we see stronger returns. During the period, we completed the divestment of a municipal water in Qinzhou. This is our second municipal water exit in China since December '25. So as you can see, we remain focused on growing the urban portfolio and its recurring income while optimizing our water portfolio to build stronger earnings base for the segment. For Alinta, the acquisition of Alinta Energy was completed in June 2026, adding a high-quality integrated energy platform in Australia to the group. On this slide, we are showing Alinta's first half performance to provide a clearer view of the strength and earnings capacity of the business. Alinta delivered a strong first half with underlying net profit increasing to SGD 231 million from SGD 101 million a year ago. This was supported by a high thermal fleet availability and Alinta has the lowest cost generation base in all of Australia through its fleet of generation plants, particularly Loy Yang B coal facility in Victoria. During the first half of '26, Alinta also strengthened its long-term gas position. It secured 2 new long-term gas supply contracts with Chevron and LNG Japan in Western Australia. The business also benefited from strong portfolio management, capturing value through portfolio flexibility across generation and retail markets. Alinta's first half performance reflects the strength of its integrated platform. Looking ahead, its strong generation, retail and development capabilities are expected to strengthen Sembcorp's earnings base, enhance recurring cash flows, and add further resilience to Sembcorp's diversified portfolio. I would like to touch on this growing wave, and some people call tsunami, of AI and data center demand. As you all know, AI and data center growth is increasingly becoming relevant to our portfolio. New data center bids require both power supply reliability and a credible pathway to low-carbon energy. This plays to Sembcorp's strength given our integrated energy portfolio and the suite of lower carbon solutions. In Singapore, we are a trusted partner to data center and digital infrastructure customers with over 1 gigawatt of power purchase agreements secured. I'm pleased to share that, as the latest development, Senoko has entered into an arrangement with Micron for the development of a direct connection infrastructure. As you know, Senoko and Micron, their facilities are next to each other in the northern part of Singapore. So this direct connection infrastructure is an important step for Senoko to support the power supply needs of Micron's advanced wafer fabrication facility, the current as well as future developments. Other than Singapore, in the U.K., our Wilton site provides a strong platform for data center development. Phase 1 with 200 megawatts of data center capacity is currently under planning. Wilton might be the only one, if not one of very, very few platforms, that is able to deliver 280 megawatts by 2028. Many players have land and -- but in order to secure power to the land, it will take them into the 2030s before the commissioning of any data centers that will come along. So Wilton, in the U.K., has a very precious commodity in the form of the powered land that's available by 2028 and in utility scale of 280 megawatts. So the site is very well-positioned with immediate grid connection, ready infrastructure as well as water availability. I spoke about Singapore and U.K. And in Australia, Alinta adds a coast-to-coast integrated energy platform with 3.4 gigawatts of operational, thermal, and renewables capacity. In generation, retail and development capabilities position Alinta very well to serve growing AI-driven power demand. And closer to home, across ASEAN, we have established data center footholds in Vietnam and Indonesia. In Vietnam, we received investment approval to develop a data center within Saigon Hi-Tech Park, very near to Ho Chi Minh City -- well, in fact, it is in Ho Chi Minh City. In Indonesia, we've told you that Batam is an emerging location for data centers supported by its connectivity to Singapore with submarine cable networks. So across all these markets, we have got platforms, ready platforms, that are able to capture the structural growth in digital infrastructure demand, leveraging on our existing power, renewables, and urban capabilities. The second half of the year, we'll start with a very positive note. For the Gas and Related Services, in July, it was a very strong month. USEP prices in Singapore averaged SGD 240 per megawatt hour. And this, of course, creates opportunities for our GIS team to capture value from the spot market. And this is, of course, markedly improved from the first half. Alinta also delivered a strong performance in July across both the East and West Coast markets of Australia during this peak winter period. The business should continue to benefit from favorable market conditions as well as resilient customer growth. In India, our renewables business also performed well, supported by higher wind resource across the entire portfolio. So these are all developments that underscore our confidence in the group's outlook for the full year. I want to emphasize on the strength of that confidence, the Board has supported us to increase our dividend to SGD 0.11 despite a weaker performance in the first half. This is part of our effort to -- in recognition that our dividend payout is lagging our peer group and is part of our -- this recognition to lever up to our peer group in terms of the dividend payout moving forward. I will now hand over to Eugene. He will tell you more about the financials and the details before we go into Q&A. Thanks.

Thank you, Kim Yin. Now we move on to the first slide. So on an overall basis, all the factors that Kim Yin talked about flowed through, right, into our underlying net profit, which are purely on a reported performance basis. Our underlying net profit was down 25% from SGD 491 million to SGD 369 million. I think from a pro forma perspective, if we have seen what Alinta would have contributed to kind of like show what a full first half run rate would have been for us this year, right? That would have been SGD 558 million. Now there are a few items below the underlying net profit to take note. I think in terms of the DPN ForEx loss, the India rupee continued to depreciate slightly against the Singapore dollar and hence, a SGD 57 million mark-to-market loss, markedly lower than last year, right? We did see the Indian rupee turn slightly in Q2 of this year. Now the fair value loss on energy derivatives of $10 million, that's a purely mark-to-market as of 30th June position of Alinta's hedge positions, so not reflective of what cash flows have been as of 30th June. And exceptional items of $152 million comprises $155 million of transaction cost, that is in relation to the acquisition of Alinta, offset by $3 million from a gain from divestment in the China water portfolio. Now this $155 million is largely substantially all the costs already for the transaction. Now some of you may ask why is it lower than what was previously guided, which was closer to $190-plus million. The reason was because in the previous guidance of the transaction cost, we have included in there the possible breakage cost of refinancing certain U.S. private placement debt facilities. So we were fortunate that upon the completion of the transaction, many of these U.S. private placement debt investors actually saw the credit improve, and hence, we're more than happy to stay. So that is a savings in terms of the transaction costs. Now if we move on to the next slide, I will go into detail in terms of group net profit impact. For the Gas and Related Services as a segment, right, we did see a 14% or a $45 million decline year-on-year in terms of our net profit. Now you have seen from the earlier slide that for Singapore, it declined by about $33 million. The contributory factors of that is really a result of lower spreads from recontracting, both across the Sembcorp as well as the Senoko portfolio through 2025 and coming into the earlier part of 2026. Now in general, our overall portfolio average spreads declined by about $8 per megawatt hour to average around the low 50s. Now we also saw a couple of things. In the first half of 2026, there were some one-off gains, including cargo diversion gains that we were not able to realize in the first half of this year. And also, there were some gas cost increase in Senoko as a result of a gas curtailment, but that impact is small. Probably we are talking about a $4 million type impact. So all this contributed overall to a decline of $33 million from Singapore year-on-year. Now the U.K. saw a close to a $22 million decline year-on-year. And as guided at the earlier part of this year, we did see a loss of customers, petrochemical customers, and as a result, also a demand from them. We are working, as I came in talking about, redesignating Wilton for the use of AI as well as data centers. And we will -- we are looking into the second half to see if something materialize, okay? Now for the rest-of-the-world in the Gas and Related Services, we actually saw a $7 million improvement year-on-year across the different countries coming from various factors, cost savings, efficiency gains, and so forth. So that's the Gas and Related Services segment. Now I'll talk about renewables first. Now the Renewables segment saw a decline of 48% or $63 million year-on-year. I think in the first half of this year, and you would have seen also the earnings announcements as well as profit guidance from pure renewables companies in China and also some in India that one key element that was quite common across the renewables business was resource, right? So we did see a weak resource across both wind and solar across China, some -- a little bit of India as well as Southeast Asia. So the impact of resource in the first half of this year actually saw a $40 million impact, close to $40 million impact of the $63 million that we talked about. And China basically saw close to $30 million of that $40 million impact, okay? And specifically for China, we also saw a couple of other impacts. One, we did talk about the VAT that was lost. It was a $12 million full year. So $6 million of that came through in the first half. And in addition to that, we also foresaw a further $6 million impact as a result of lower market trading tariffs for the portion of the China portfolio that has to be put on market trading as a result of the move towards more market trading by the various provinces. Specifically for curtailment, it is rather mixed. We did see curtailment improve for certain provinces that includes areas like Guangxi, Yunnan as well as Guizhou. And we did see worsening in some other regions as well, particularly in Hunan, where hydro output was high and increased. Hence, there was increased curtailment across solar and wind. And also in Ningxia itself, where there was a one-off outage of a cross-province transmission line for inspection. So in the second bucket of curtailment impacts, at least at this point in time, it doesn't look like it's systemic. Now the Northwestern part remains elevated and unchanged. So curtailment remains high in the northwestern part of the country, right? I think for India, there was some resource impacted in the first half, particularly over wind. But as Kim Yin has highlighted, we did see a strong improvement of that in July. Now for our storage portfolio, right, which is largely centered around the U.K., we did see batteries prices decline by about $5 million in the first half, driven purely by supply and demand dynamics in the market. So basically, that accounts for the renewables performance and a big part of it is really due to resource in the first half, okay? On Integrated Urban Solutions, net profit declined by $16 million. And of course, SembWaste no longer contribute. So that in itself contributed to a $10 million decline. Now urban saw a $4 million decline year-on-year, but that is really contributed by a delay in the recognition of KIK's 40 hectare of land sales. Now again, in the first half of this year, we did see more rainy days and hence, the land preparation and the resettlement was a little delayed. But I'm very happy to say that we have completed the handover to the customer, and we have booked the earnings in August, it would be booked in August, and that's about $11 million. So see it as $11 million, which would otherwise have been booked in the first half, essentially moved into August. So all in all, IUS, apart from some timing of land sales, no real surprises there. And I'll talk a little bit about Alinta. So we closed the Alinta transaction on 11th June 2026, hence, not any meaningful recognition. But I think it's important to note that the first half performance was strong, right? We saw $231 million contribution from Alinta in the first half on a full half basis, which was a meaningful growth year-on-year. Now it's important to note that from that $231 million, $100 million of that is, really, from optimizing our green certificates portfolio, right, against a certain offtake. And it will not be repeated in the second half, but we do have visibility of the optimization opportunities into 2027. Decarbonization Solutions, essentially, we did see our losses narrowed by $5 million, and that is really driven through a tightened cost control. And from a corporate perspective, interest cost increased slightly, $3 million. That is really for the purpose of funding the acquisition of Alinta in June. And our overall corporate cost, we did tighten by $6 million, which is a result of a tightened cost management as well. In terms of other business, which really comprises the -- our specialized construction business as well as the Mint business, it declined slightly, but this is really as a result of the timing of percentage of completion recognition of the projects that the specialized construction management business is operating. So all in all, those are the key segmental operational updates in the first half that really explains the results. Now moving on to our group capital expenditure. We have significantly tightened CapEx and investment spending, excluding Alinta, where we did $257 million of CapEx and investment spend in the first half of 2026 relative to $567 million the year before. And of course, the equity payment for Atlanta was close to SGD 4.4 billion that was -- that outflowed in June of this year. Now when we move over to free cash flow, okay, this -- which is the next slide. So this is the slide where I have to go into some details in terms of reconciliation, okay? Now I have to talk about some numbers to put first half '25 and first half '26 on a like-for-like basis, okay? So in first half '25, we reported a free cash flow of SGD 1.3 billion. But out of that SGD 1.3 billion, if you look in the cash flow statement, you will realize that SGD 383 million of that is really proceeds from the sale of SembWaste. So if you remove that, our first half free cash flow would have been SGD 930 million, okay, SGD 930 million for the first half of 2025. Now if we look in the first half of 2026, our free cash flow were impacted by 3 key things. Number one, Alinta's transaction cost, SGD 155 million. So that clearly wasn't incurred last year. There was also SGD 80 million of a prepayment in relation to Taweelah C for the commencement of a project that sits in our working capital, right? Of course, that will reverse itself out later. And then in terms of our deferred payment note receipts, so there was a slight delay in the funds flow. So about SGD 90 million of that will flow into Sembcorp in August this year rather than in the May, June period. So when you adjust the free cash flow of SGD 373 million of all that, you end up at SGD 700 million. So the difference of SGD 130 million of first half free cash flow, you would notice that it will tie in roughly with the underlying net profit decline, of which, as I mentioned, as Kim Yin mentioned earlier, we do expect the second half to be stronger. So when we look at the group borrowings, our net debt right now sits at about $13.9 billion, and it increased by about $6 billion. Most of it is a result of the acquisition of Alinta, the equity purchase price as well as consolidating Alinta's net debt. And we also continue to deploy capital for the completion of CCP 4 and also the execution of our ongoing pipeline in SGI, which is our India Renewables. Now it is important to note that we have reported our net debt to adjusted EBITDA on a first half pro forma basis. So what does that mean? So we took our first half, including Alinta, for the full half run rate. But of course, we excluded roughly $100 million of the LGCs gain from Alinta because we do not expect that to be repeated in the second half. And on an annualized basis, that comes up to a net debt to adjusted EBITDA of 5.3x, which is roughly expected as a result of the completion of the transaction. Now we remain very confident that with the continued cash flow as well as the some growth expected in Alinta, the delivery of CCP 4 going forward as well as continued development of the pipeline in India as well as a possible capital recycling exercises, we will deleverage in the coming years to come. Now in terms of the group debt profile, I think from a debt maturity profile, it hasn't changed a lot, right? You will notice that our weighted average debt maturity actually have improved slightly in, in spite of a rolling forward 1 quarter and funding from Alinta. And also our weighted average cost of debt came down from 4.5% to 4.3%. That was because the funding of -- in raising the financing structures and debt for Alinta, we have achieved a very attractive metrics. The weighted average cost of debt for the funding of Alinta's acquisition was 3.4% and the weighted average tenor for the Alinta funding package was about 6.6 years, okay? So very strong financing metrics. Now you will notice that our hedging profile has come down from the 70-ish percent down to 57% fixed. Now that is because in the funding of Alinta, about $1.6 billion of that, we are now using a 2-year revolving credit facility at very low cost. That in itself is close to about 1.5% in terms of interest cost. So the reason why we did that was because -- so with this RCF, we will be better able to strategically tap the different types of markets, whether it is the bank market or the long-term bond market to term out that 2 years RCF, right? I think in addition to that, if we have a 2-year runway to term it out, it also gives us the opportunity to reduce that $1.6 billion through paydowns. So we may not need the full $1.6 billion in long-term permanent debt, which obviously on average will be at higher cost. So that is the strategy that we chose to take. So in short, it simply means that the 57% fixed ratio, ceteris paribus, all else equal, you would expect that to increase as we term out the $1.6 billion 2-year RCF. But all in all, we are very pleased that we achieved very, very competitive terms as well as the cost of financing for the acquisition of Alinta, which is also a testament of the financiers view of the asset that we acquired, led by a very strong management team led by Jeff. And the last one is to talk about group liquidity. Our cash and equivalents have increased as a result of the consolidation of Alinta and our unutilized committed facilities also increased from $2.5 billion to $3.6 billion. So more than ample liquidity across the whole group. Now I'll talk a little bit about the outlook. The outlook statement in itself, I wouldn't read it. I'll leave it to you to read it in itself, but I will talk about the different segments in greater detail. For the Gas and Related Services, I think we know the first half 2026 backdrop, right, where we saw a weaker performance because of lower recontracted spreads and certain gas curtailment and also a U.K. market softness. But as we head into the second half of 2026, directionally, we expect second half of 2026 to be meaningfully higher than the first half. Now there are 3 key areas to take note. Number one, we will have higher levels of retail and vesting contracts that we'll be generating for in the second half compared to the first half. And these are also contracts with slightly better spreads, okay? Secondly, we do see portfolio optimization opportunities. as a result of occurrences of the first half, we do have some excess gas in the second half. And with the additional capacity that the CCP 4 presents, we see the opportunities of potentially optimizing that gas. And by optimizing the gas, it could be a sale of the gas or it could be generating the gas into the pool. And of course, we have to see what gives us a stronger spark spreads -- implied spark spreads. And of course, the third thing is CCP 4 significantly more efficient. So you would see improvement in the spark spreads simply by heat rate efficiencies. So Gas and Related Services. I think for Alinta, in the second half -- well, okay, back to Gas and Related Services Kim Yin has also highlighted, I think we also had a strong July month, driven by a strong USEP outcome, and we did see some pool gains. Now for Alinta, for the second half, you have a 6-month contribution. The performance will largely be supported by a pretty favorable operating conditions and also our resilient customer book, right? In July in itself, Kim Yin also highlighted we see a strong performance -- trading performance across both West Coast as well as East Coast. But at this point in time, I'm still holding on to the $100 million contribution in the second half for Alinta. And then for the Renewables segment, I think in the second half, performance is always seasonally lower than the first half, right? But I think the -- we will also continue to execute the growth pipeline. But of course, when you look at the schedule, we are not expecting a lot of capacity contribution coming through in the second half. The only point that I will note for the second half of 2026 is that we continue to watch closely the resource situation. I think there potentially would still be possible resource uncertainties, although in the month of July, factually, we did see both wind and solar resource improve against our expectations. But we will have to continue to monitor how a possible resource variations could take place in the next 5 months. And for Integrated Urban Solutions, we certainly expect higher land sales simply by the timing of land sales. We have a clear visibility in terms of the pipeline that's underpinning the order book for the land sales. And as mentioned earlier on, we have already confirmed the recognition of close to SGD 11 million as a result of the completion of the 40 hectares of land handover in KIK. So I think that completes my report in relation to the first half of 2026. And the key note is that we do expect the second half to be meaningfully stronger than the first half, and July data shows the green shoots of that. So thank you and open for Q&A.

Thank you, Kim and Eugene. We will now proceed to the Q&A session. For those in the room, please raise your hand and a microphone will be brought to you. Kindly state your name as well as the organization that you represent before you ask your questions. [Operator Instructions]

My first question is current spot spark spread have spiked. Has this been mainly driven by the force majeure? And if yes, when do you expect the overall spread to be -- spot spark spread to be normalized?

Okay. [Foreign Language]. No, I think, Siew Khee, in -- at least based on what we are monitoring, we know that the USEP, it's always driven by marginal cost of SRMC, right? And the key SRMC, of course, is JKM. I think for many of you who have interacted with me post March up to May, June last year, the issue was that JKM has no conviction, right? It increased up to $18. And then next thing it comes back now $15, $14. But I think through July, what we saw was a pretty firm JKM outlook, $20, $21, and it remained that way. And that really drives the USEP outcome. I think the reality is that it is hard to say, right, how that will hold out for the rest of the year. But if you look at the forward curves, normalization of JKM seems to -- it seems to suggest that normalization of that is really post 2026 into 2027. But again, those are forward curves. It can change. So I guess the point that I'm trying to make is that we are seeing firmness in the JKM market. But of course, that situation could change.

So the forward curve, however, possible changes that you can happen, that's the best you can go away, right? So today, you look at forward curve, it has firmed. People can offer all kind of reasons why, right, compared to the Ukraine situation where suddenly there was a shortage and then prices spike up. This time around, because of preparation, many economies are able to draw on their storage, right? Maybe it has gotten to the point where some of the storage is being used up, maybe, right? Or it may be that the people are already factoring in that this situation in the Middle East is going to drag, right, on-off, on-off. And because of that, they start to price it into the gas prices. But it has -- if you remember, when we first looked at this, we were actually quite surprised that it didn't go the way Ukraine did, right? So -- but now I think that this -- the forward curve is the best way to think about where the market is heading, right? So I don't think we can sit here and have a crystal ball and tell you that it's going to stay there forever. But we also cannot offer any reasons why, but I was just trying to suggest some of the conventional wisdom. You ask AI today, they will tell you that all okay, use the storage. So -- but all that chewing up a lot of time, I was just trying to say that we do think that this time, it could last at least for a short while, right? It probably will last because there's no good reason for it to come down also. The demand is actually quite firm, and you can see new demand coming through over time. So it's -- with demand holding up and the main factor being the supply and if the supply side dynamics doesn't look like there's any possibility that the things will just dramatically improve from a supply side, and the forward curve should hold out.

Then just on the new plant coming in, which month will it come in?

It will be early part of -- end Q3, early Q4, yes.

It's already connected to the grid. It is already generating power, and we're already clocking revenue. But it will be coming on progressively ramping up, right? So of course, we want to do more of that sooner than later, but it is really connected to the grid as we speak.

Okay. I just have 2 more questions before I jump back to the queue. So just on that itself, just if you use your crystal ball again, next year, we have so many new plants coming in. How do you actually manage to rationalize your old plants or optimize your overall portfolio so that the market is rational that the spark spread -- spot spark spread don't come down because there are so many plants that are coming in.

I think the -- what we have explained in the past is that with the portfolio, right, we're not just going to pump all the electrons from the new plant in addition to the old plant into the system, right? Some of it -- what we have is a portfolio of customer contracts. So we are using the more efficient plant, the new plant, to substitute out some of the less efficient plant to serve the customer. In so doing then, customer contracts don't change, right? Then if you are able to burn less gas, you actually make money. So that's one effect. The other part of it is, of course, we told you about contracting strategy. So with the bigger fleet of plant, then that gives us that opportunity now to contract more aggressively right? So the contract portfolio, we are continuing to pursue that. And then we would -- over time, the market share would then reflect the increase in the new plant. So what I'm trying to explain is that please don't expect that 600 megawatts of plant get commissioned, then suddenly our revenue goes up by 600 megawatts. It's not going to happen that way. It will be responding what we're doing is using our fleet plan and repeating myself to respond to serve our customer portfolio. And this customer contract portfolio will grow over time into the near future. So we feel actually pretty good about it. But net-net, there will be on the fringe additional revenue. As I told you just now, we are already connected to the grid. So for this second half of the year, earlier, we were thinking maybe it's October, November full commissioning, right? And for purpose of financial projection, we started adding numbers into the budget for October, November, but we are clocking some of that revenue even as we speak, taking advantage of the plant being connected and taking advantage of the higher use set in the market in the meantime. You okay there? CFO always wants me to be...

Next, Mayank.

Mayank from Morgan Stanley. So Kim Yin, first question for you at a portfolio level. 40% of your book value now sits in renewables. And obviously, it's been a struggle for the last 1.5, 2 years now for you. How are you thinking about capital deployment in renewables? Because even in the first half, a large part of the CapEx went into their ex Alinta. So is there a rethink around capital allocation in renewables in itself? And I think a related question on China, you said some of that capacity is now in the market on a spot basis. What percentage of your China renewables is now on spot?

Okay. I will ask Eugene to help me out with more details on the capital, but capital allocation is a reflection of your strategy, right? So the short answer to your question is, yes, the way we allocate capital is constantly adjusting. And when we see better opportunities, it will naturally attract the bulk of the capital, right? So Alinta was the big opportunity in front of us in the last year. So we shifted. Yes. So it's very clear how we allocate capital in that space. Renewables, from a business -- a longer-term business perspective, we believe that -- we call ourselves energy transition player. We believe that each of these sources of energy will continue to have a place in the energy mix of the customer. Customer, broadly speaking, could be countries and grids. So renewables will continue to have a place in many, many energy mixes. Yes. And you saw what happened in the Middle East and so on. Everybody has some sun, everybody has some wind. So there will be that desire to deploy assets in order to capture some of this. So we will be selective in trying to capture this. So renewables is a place in which we will continue to be looking for opportunities. But now that we have had a portfolio, right, we know we got Singapore, which is where we are very strong, right? And we -- frankly, please don't repeat the regulator, we're almost the only game in town. 60% of what's going out there is generated by us. China, we have got a lot of experience, not doing well at the moment because of all the reasons that we explained to you. But India, we have a very strong team as well, right? So we are then in a very good position now to capture those opportunities that will come along, the better ones. So I'm trying to paint the picture that renewables will always be there. We have a good position. We will leverage on our good position to capture this, always be there, better opportunities among them, right? So you can use the word selective, but selective might suggest very, very careful. But I'm saying in the context of your capital allocation question, we're looking for the higher margins. Yes. So that's why we say that, look, in India, we continue to feel good because our portfolio of projects that are coming online, what we call pipeline, those are secured. They are all in hybrid projects where the margins are higher. And so we're comfortable with that. So then in terms of moving forward of capital allocation, the -- I spoke of renewables, but I also want to touch on gas and related. We continue to think that gas and related this season, and I'm talking about 5 years, 7 years, 8 years, will continue to be very high in demand because this is the one fuel that is reasonably clean and yet able to provide very reliable power to meet this tsunami of demand coming from digital infrastructure. And we are seeing that in Singapore, as I told you, we are seeing that in the U.K., right? People are coming to us. So in a way, Wilton a chemical customer exiting -- at that time, we were all gloomy and all that, people sitting in front me was like you went there are so many trips to try to fix things. But it turned out to be a blessing in disguise because it compelled us to quickly pivot. And in that process, then suddenly, we realized we are the only sites in the U.K. that can do 2028. So the players who want to do fast, and of course, if you talk to any data center people, they say, "I want it yesterday." So it become -- position us in a very good position to cement that relationship. So gas -- coming back to capital allocation again, so renewables, there will be allocation. Gas and related, there will be allocation, and we will be directing it. I know I probably not an answer that you'll be looking for, but it's a generic answer that we'll be directing it to -- it will be chasing the higher-margin for this projects.

I think there's a second question on the proportion of the China portfolio that is now spot, right? Now back in 2024, we were around 15% or so, right, because the -- and I did guide the market that our expectation is that all the province will start moving more and more. So today, almost around 50% of the portfolio is spot ready. So they are accelerating that move.

So that number should remain around that 50% range going forward? Or you think a larger part will go into there?

[indiscernible]

No, I was just saying that with that 50% now ramp up closer to a bigger number as you kind of...

The revenues are roughly about 50-50 split between the spot and secure.

And that should remain around the same range going forward?

It will increase over time.

I think the second question was Alinta. While you had some very, very good quarter compared to your peers, especially AGL and Origin when you look at their numbers as well. But your net profit is still near breakeven, correct, if you look at first half? So question was more in terms of what did you guys do differently at the Alinta level versus the peers? And second thing is when we can see some ramp or if you can just give us a bit of an idea around below the EBITDA line items around Alinta.

Mayank, can you repeat that part? You were saying that the breakeven, what was the...

Alinta, if you look at the net profit was around $5 million for the...

No, that is -- no, no, no. Mayank, $5 billion is because we completed the transaction on...

Really just because of that. Got it. Otherwise, what would be the...

Full first half net income of Alinta was [ SGD 238 ]...

Okay. So that was the run rate that was normal...

Yes, yes, yes. So the reason why we showed the full first half so that you know the run rate, but the SGD 5 million was because we only completed on the [ longer term ].

So otherwise, it's the normal run rate then. Okay. Got it. Yes.

You gave me a scare.

You scared me. I was like, you stunned me.

Yes. Okay. So then run rate is fine. But on the EBITDA line, the numbers were pretty good, correct, in the first half versus the peers. So is there something that you can kind of give us an idea around, especially on the West Coast, the numbers were pretty good -- sorry, East Coast, sorry. Anything you want to kind of highlight?

Maybe this is an opportunity to introduce you Jeff Dimery. He's sitting right here. Perhaps Jeff can give a little bit of a synopsis as to how you deliver superior results.

Yes. Thank you, Kim Yin. I think the first point I would make, if you're looking at AGL and Origin, they don't have nearly the same exposure that Alinta has to the West Coast of Australia. And obviously, they've commented on the market conditions in the East Coast, where we're seeing a decline in forward prices, et cetera, at the moment. I would contrast that with the West Coast of Australia, where we're seeing record prices. So we do have quite a bit of exposure there, and we're performing very strongly in that space. On the East Coast of Australia, Kim Yin and Eugene both mentioned our play around the renewables market, around the certificate contribution from the LGC. As Eugene pointed out, we have that same opportunity in 2027. So that will come to an end. It's part of the previous legislation around how we can, I guess, bank renewable certificates and that scheme ends in 2030. So it won't be ongoing. Having said that, what I would say, and I note that the CEO of AGL also said this, when you look at the East Coast market and the outlook in Australia, today, the market prices are well below new entrant level. And so we don't think that they're sustainable where they are or we'll get no new investment in capacity into the market. And I say that against the backdrop, which is a global theme. We're seeing exceedingly strong demand for data centers. We're seeing an enormous push now into the electrification of vehicles off the back of what's happened in the Middle East. So I guess the outlook we're saying is that prices are quite subdued on the East Coast. But as we look forward with demand rising, we will need new capacity. And right now, the signal is not there. So we expect -- and I think our peers would equally expect to see a forward change in market conditions in the not-too-distant future. Having said that, the last point I would make is that whilst you are seeing declining forward curve relative to where it's been historically. We've been pretty well-hedged, so we are insulated to an extent, both today and for the short-term future in our portfolio management. So we're not anticipating. As I think the guys alluded to, we're very comfortable with the balance of calendar year and what the contribution is looking like.

Thanks, Jeff. So in a nutshell, just to -- if repeating -- at the risk of repeating, we are guiding that the second half 2026 contribution from Alinta, in terms of net profit to the Sembcorp Group, will be [ SGD 100 million ], right? So that's guidance...

It's not changing.

Yes. So usually, the first half is slightly stronger, right? So the full year will be 220, 230 type number if we were at 1st January today guiding 2026, yes. So that's -- just to be clear, that's the number. In terms of the underlying fundamentals in Australia, we are optimistic even though it is a merchant market, right? And first, Alinta is -- has a big retail portfolio that it is hedged. Maybe not 15 years, 18 years like what we can get in Singapore, 2, 3 years, but it is a retail portfolio that is also quite sticky. The other part of it is that Alinta has got low-cost generation, right? So that underpins its ability, its competitiveness in terms of keeping customers and in terms of locking in margins. Yes. The other thing is that Alinta has an East and West Coast market. In the West Coast, they are dominant, right? And they are also very strong in the gas market. So then where the market is heading, demand is growing faster than all the planners have expected. So that's the first thing. And we all know that in a place like Australia, if you want to plan new plants, it will take time, right? So even in the past, supply has trouble catching up with demand. Now with demand going up faster, the supply will take -- is actually under a lot of pressure. So in terms of market outcome, that's a good reason to be optimistic, right? So the macro is there, demand versus supply. The micro in terms of the business, low-cost generation, strong position, good management team. And that's why we're quite comfortable that this is a recurring cash flow and recurring income portfolio that will really enhance the resilience of the Sembcorp portfolio. So that's that. I want to also add a little bit more to the earlier question on capital allocation between renewables, gas and so on, right? So of course, IUS is IUS, we laid out the plan what we're doing. We're recycling capital. We're selling some of the municipal water and so on. We sold SembWaste, right? So then in the meantime, we are allocating capital to build recurring cash flow. So ready build factories in Vietnam, where we have got good access to good locations and good land. We're building up the land bank. So that part of it, there's allocation. Then in terms of gas, we spoke about that. Then renewables, I just want to add that really, we will continue to chase after the good margin projects. And where we think we would have the opportunity in terms of geography is first, India, right? As I told you, we have a good team. We have a good portfolio that is currently being developed, but we will be chasing more, but we will be conscious about chasing the good margins. But the other one is Australia, right? Because, again, the fundamentals I described to you just now. And to the extent, Alinta is in a position to build renewable portfolio to complement the existing fleet of gas as well as coal power plants in order to serve the customer better, to create optionality for their portfolio trading and optimization. Those are things that -- those are areas that we would invest in right? So that's where the -- just to complete additional geographic dimension to the capital allocation question.

Joy from second row.

Joy from HSBC. First on -- if we can go back to spark spread, I think, Eugene, you mentioned average spark spread came down about $8. If I look at your price, I think there's a fair chunk at Senoko has already been repriced. How much more downside do we have on that your current spark spread? So that's the first question. Second, on dividend. I mean, you alluded to increasing dividend. Should we take your first half payout as your full year payout? Or should we look at the percentage of growth as an indication to a full year dividend number?

No, you're drawing a reaction from me. I'll answer the second question first.

He answered the second first.

If we're going to stop at SGD 0.11, you can take this company private. No, right? First half is SGD 0.11. Last year's first half was SGD 0.09, right? Last year's full year was SGD 0.25. So the -- we are -- I want to be very careful in my words because I was given a specific mandate what I can say, what I can't. But first, we recognize that we lack our peer group internationally as well as domestically. So domestically, if you look at it, the numbers roll off my tongue, ST Engineering payout ratio, 80-some percent, Keppel payout ratio, almost 70%. The bank's payout ratio, DPS is -- we know what they are. I think you will be more than 100%. So we lack our peer group. Peer group, today, any investor coming into Singapore will look at the stock exchange and they say, "Where do I pull my money, right?" So then if Sembcorp is lagging the peer group by so much, of course, we're the first one to be sold if they have to pull their money. And if they had to -- if we want to attract capital to come into our stock, we have to increase our payout ratio to at least be at par with our peer group, right? So that is something that we recognize, right, that we are lagging. So now you will see in the last few years, our behavior, it has been a steady increase from '24 -- '23, '24, '25 and now '26, right? So short answer to your question, no, it is a half year payout, right? And you can -- if I was an investor, I would extrapolate the full year payout with also an increase in the second half, right? So because that is in the backdrop of what I told you, what we recognize that we are lagging our peer group, right? And that we think that's one aspect to it. The other aspect is that we feel that we are actually very comfortable doing this in terms of that increasing the payout ratio, which we are very committed to. Why? Because the cash -- underlying business and the cash flow is very strong. And Eugene will be able to show you scenarios whereby even if we -- net profit doesn't perform as we expect it to grow, we will still be delevering quickly back into the 3x, 4x debt-to-EBITDA range in 3, 4 years' time. So we are very comfortable with that. And because of that, then the cash flow other than investing activities, returning it to shareholders through dividend is also an important signal to the investor community. So short answer, it's only for half year $0.11, and we are -- we recognize we are a lagging peer group. We are committed to increasing our payout ratio. The only thing I fall short of saying is to tell you what is the target.

I guess -- yes, just to clarify, I guess what I'm trying to say is $0.11 is about 53% payout on the underlying profit for first half. Can we extrapolate that ratio?

I think for this particular year on a non-pro forma basis, not unreasonable, okay? And I think historically, how you have seen we have done it, it's -- if it's a year of dividend increase, we like to think of it of increasing both first half and second half also. And we also distribute our targeted increase for the full year accordingly, right?

I don't remember the numbers, Eugene. In 2025, first half was SGD 0.09, right?

SGD 0.09, that's right.

2024, first half was...

First half was SGD 0.06.

SGD 0.06. Okay? Then 2025, second half was what?

SGD [0.16] So the difference of...

2024, SGD 0.13. Okay. Sorry, I don't have a slide to show you that, but I'm trying to show you that there's a track record you can go back.

There is a certain pattern that we do.

Yes. So I tell people, we are committed to steadily increasing it as opposed to increasing it one round, right? So somehow many people feel that steady is always better. I happen to be a little bit on the other side of the camp, but it doesn't matter. So because we are comfortable with the -- more importantly, we are comfortable with sustaining it even while we delever. So that's very important. Sustaining an increase. When I talk about sustaining, I'm talking about sustaining and increase. I'm not talking about sustaining at this level. Sustaining increased we delever, right, because the cash flow supports that. So I don't want to belabor that point. Our focus -- let's focus on the season today. It's SGD 0.11, it's SGD 0.02 more than what it used to be. And then year-end, we expect to be able to sustain the growth.

You had a second question.

Spark spread.

Spark spread. So now Senoko, we left about 20%, right? Of course, it's 20% for recontracting. A lot of it has been negotiated already. Now of course, we don't expect this to be as high as historical. But we are quite happy that the spark spreads that we are landing at is better than at the start of the year. Remember, we were struggling around 30%, 35% early on. But certainly, for this, it will be better.

And I think in the past, we have told our stakeholders that our portfolio-wise in terms of contracted portfolio for Sembcorp, we are sort of in the more than $50 range, right? So now with the market, the spot spark spread being closer to the -- between $60 to $90, it also presents opportunity to go and lock in better quality, better price, better margin contracts, albeit for the short term, right? But the longer term, if this sustains, then again, there may be an opportunity then to lock in long-term contracts. So the last month or 2 give us a lot of confidence that things are turning.

Horng Han from CLSA. I just want to ask 1 question with regards to the importation of renewables from Malaysia to Singapore. Is there a PPA contract for this? And if there is, what sort of return should investors expect? And to conclude, this would be in terms of cannibalization of existing demand, should we see more of this renewables importation coming to Singapore? Would this partially, to some extent, cannibalize the existing demand coming from gas-fired power plant?

It depends on price. So when it lands, what is the price, right? So at the end of the day, customers are selective based on price. So the import today, the -- you have to factor in the generation cost as well as the transmission cost because transmission undersea cable, even if you bring it from Peninsula Malaysia, there's still a short distance of undersea cable. And then in between the governments, there is also -- they need to negotiate what is the toll, right? So you factor all that in. Today, if you ask me, I don't think it is as competitive as the domestic generation. I dare say that. Today, basic, if you add all that in of what upstream generation wants, what the transmission needs, and what the government wants to factor in on top of it as a margin, is still much cheaper to generate onshore. Let's put it that way. So it will come, right? But at a point where there's still a distance -- let's put it this way, there's still a distance between what could be attractive to customers in Singapore from what the -- what people are asking for, for both generation and transmission. Chiap Khiong is here. You want to touch on that? He was saying you covered it. So whether it's going to cannibalize, definitely not in the near term. I can't see it. Even if it lands, it's going to be expensive, right? So it would take away maybe the people who are very sensitive to green, right? So if somebody willing to pay $300 per megawatt hour, $280 per megawatt hour for green power, then okay, that customer might have to go there. But other than that, no one is going to pay that type of money for -- not in Singapore.

Sure. Can I try to understand from a distributor perspective, right? Because you operate power plants at the same time, you are also importing and distributing renewables energy into Singapore. What -- should we think that from a risk/reward perspective, distribution of electricity or the selling of electricity coming to Singapore would perhaps you will demand a slightly lower return compared to your power generation business?

No. It's the same customer that I'm serving. So when I have the same customer, I can choose to give him power from my CCP 4. I can choose to give him power from my Sakra. I can choose to direct that power source to Senoko, right? I can go and buy from Seraya if they sell me cheap for whatever reason to serve my customer. I can also then bring it in from Malaysia or Indonesia or for that matter, Vietnam to give to my customer. So you can see that it's actually a very simple equation. This is what my customer willing to pay, right? Then what is the source that I would direct to serve my customer so that I maximize my margin. So if, let's say, in Singapore, I'm generating my power from my CCP 4 at $50 per megawatt hour, my customer willing to pay $150, my import is going to cost me $120. Why would I take the import to serve my customer, right? I would just run my power plant and then collect the $100 margin. So it's as simple as that. So then it's the same dynamics. I'm going up to the upstream and telling an upstream generator, it could be in Sarawak, it could be in Malaysia, it could be in Batam, and I'm saying that, "Hey, look, I can sign a contract with you, but it has to be of this price that's worth my wow." So it's actually very commercial, right? So coming back, if -- I can see the underlying question is whether or not this market dynamics moving forward will be materially disrupted by incoming new sources from the neighboring countries? And my answer is that not in the time frame that we are planning. Let's say, if I'm planning 2028, 2030, I can't see that happening at all. Even if it lands, it's going to be in the $300 range or $280, $270 range. And that range is just not competitive based on what we can deliver at that time.

Can I just circle back to the discussion towards USEP prices, right? I mean if you look at past cycles, USEP tends to correlate very much to supply-demand dynamics, it basically reflects supply-demand. But I think this relationship is no longer so straightforward this year on the back of Iran war. And I think if you look in terms of the price trend, it's basically rebound very strongly on the back of the geopolitical tensions. So the question I have is that spot spark spread has gone up significantly higher, as you mentioned, $60 to $90 range is very attractive. But at the same time, we do have a lot of supply coming through. So can we try to get some insights with regards to the discussion you have with your customers, those who want to sign a 15-year contract. Are they looking backwards how spot spread price trend has been? Or are they looking more forward given that spot prices have gone up a lot more or they could be trying to renegotiate and delay some of the signing of contracts there?

How the customer thinks you can probably have a better guess than many people. But I will ask Chiap Khiong to address the customer part. But I want to first mention that this is not new to us. This volatility in the market is not new to us, right? So if you -- I don't know whether you were covering this company before I came here in 2019, 2020, right? In that period, we had a bat. There was too much of capacity, demand was not what planners expect, right? So then margins are very low. So customers are thinking about the past and looking to the future. We ourselves are also doing the same. And that's why we keep on emphasizing that our strategy is to make sure that we are not overly exposed, and we insulate ourselves by signing contracts, right? So if we didn't sign the contracts that we did, if we didn't have the contract portfolio that we did, today, I might suggest that our -- based on the $30, $40 spark spread, Singapore instead of delivering $600 million, $700 million, we will be delivering $400 million. So we would be a $500 million company instead of $1 billion company net profit-wise. So we're somewhat insulated or rather we -- somewhat is the wrong word. I think we have insulated ourselves very well in terms of thinking forward. And when we commission CCP 4, and that's why just now in Siew Khee's question, I'm saying that we are building the supply, we are lining up the supply in order to serve my customer portfolio. So the mentality is that, "Look, I have got these customers, I got these contracts, I got this margin. what is the plant that I need to go in?" Now I'm talking about this because you have to think about with someone who doesn't have my competitor who doesn't have this contract portfolio, what will they be doing? They will be planting and then they'll be trying to sign up the contracts. Some of them are copying our strategy to sign contracts, but -- and they also -- the bulk of the generation will be a little bit like Senoko selling into the pool. So when there is more supply than the demand being expected coming through, you are right. You could expect that prices will start to ease, and it might go back to the days of the 2017, 2018, right? But again, I'm saying that we are first insulating ourselves. Second, in planting new plants, we have factored that into our considerations. And then in terms of engaging our customers, we are also going to the high-quality customers who are wanting to have stability rather than having to ride the cycles, right? So someone like a Micron, for instance, that's why we keep emphasizing the relationship with them and the direct agreement that we just talked to you about. These are people who have a very long-term investment horizon, right? So even when things were bad, they were still planting. Now if you look at the Micron financials and the latest release, these guys -- the business is just booming, right, because of the high bandwidth memory and all those things that are going into their planning. So the high-quality customers are more likely to want to have stability, and this is where we have a sweet spot, right? Because, again, we have a low-cost generation efficient. We have low-cost gas. Well, low-cost gas, maybe competitively priced gas, right? We have LNG, we've got PNG, and then we got the power plants. And then now we are increasingly also extending the contract strategy into Senoko, right? Because the Sembcorp portfolio is largely contracted. So now we are extending that contract strategy to make sure that Senoko will be less exposed. Never mind that Senoko will have our payback, right? Whatever that we pay to acquire it, we already got it. So -- but that extending that contract strategy, if we are successful. And in this case, Senoko and Micron moving forward, then it will again -- what we did with Sembcorp portfolio, we are hopeful that we can replicate that with the Senoko portfolio such that it will then elevate itself from a very volatile earnings profile into -- there is a base load that he can count on through contracts. So again, we move away from -- so Senoko, hopefully, from a $500 million here, dropping to $100 million next year and then going to $600 million following year, we will try to get it to then stabilize at $400 million, $500, right? So that's the strategy. It's not quite there yet, but I alluded to it just now in my delivery that Senoko, with our help, has signed a direct connection agreement with Micron. It's significant because with that direct agreement, there is Micron and Senoko has a cost advantage because now you can connect directly without going through the grid. So I'm saying all these things because I think Horng Han, you're asking your question is saying that, look, is this market going to hold up, right? So then I'm trying to say that I don't know, right? But I spend the time then talking about what we will do to navigate this market whichever way it's going to go. If it goes high, great, we are there, we'll capture it. If it's going to have an oversupply situation for all the plants coming online, our strategy is actually to make sure that we will hold out not just the Sembcorp portfolio, we are now extending it to the Senoko portfolio. And we also just told you that we have just achieved a very good step, a next step in that strategy with the Micron direct connection agreement. So I would like Chiap to help me out talk about because he deals with the customers directly, so it's better to hear from him.

Yes. Thanks, Horng Han. I think the customers part is quite interesting. If you look at Singapore, additional growth for demand, which sector, okay? Comes namely from semicon and DCs. And we are quite in a very interesting position for capturing the market in these 2 segments. Why? Semicons are all growing more in the north side, the North, Northeast, and Senoko actually stands in a very, very interesting position. Micron, just for info, they take about 10% of the whole Singapore power is our strategic customer. So our linkage to Micron, as they grow, like what Kim Yin say, they are not looking at up and down, they are looking at stability of electrons, whether there's electrons, whether the price is stable instead of when they initially -- before they contract with us, Ukraine war came, the prices was crazy high. So in terms of 10% needs of the power requirements, they will never be able to take this kind of shocks. So they're very happy to look at long-term agreements, and they are happy to look at a partnership with us. So semicons, we are in a very, very good position to actually look at the increasing growth. DCs, if you look at all the requirements in DCs getting a license, they need a lot of green elements, and we are also there. So these 2 segments where the big demand is we are very, very close to the customer. And if you look at demand supply, we have new machines. The way that we are thinking about it, the baseload we'll be contracting to with all these new customers, new growth, new customers. Then Senoko and ourselves, we've got some old machines, we can actually then flex it if the wholesale price goes high, we actually flex it. So I think we are in a very good, comfortable position where overall demand and supply may be a bit mismatch, but where the customer is, where the long-term agreements are, we are quite in a good niche to cover them. And then we have the flex of opportunistic play as well. So why customers like us? Because we've got good machines, we also can access to gas. We have a good portfolio of green and new stuff like bio-methane and also. I think all this adds elements to why we believe that customers will come to us. And we have to work very hard to also caught them, but I think naturally, there's a fit between us.

Just to add a little bit, the 2 aspects. One is that this, we are customers selecting us, we are also selecting customers, right? So we are going to customers who -- as you can see from our past behavior, we are able to secure some of these people who are prepared to sign very long term, right? And we are selecting customers that are having that priority of stability versus short-term gains, right? So if you go to analyze the value chain, let's say, for a data center filler, the type of margins they're going to get in operating a data center is much, much, much higher than the margins that one can get selling power, right? But we're not getting into their business. But what the point really is that if power supply is disrupted, that very, very high margin that they can corner with their customers will be affected. So they don't want that, right? So they have bigger fish to fry than try to negotiate with me for the last SGD 0.05 of power price. You can see -- so what they rather have is go to someone who can, in that market, give them what they want, but be able to stand behind it reliably. So to Chiap Khiong's point, we have all these sources, right? I've got older plants, I've got newer plants. On a bad day when my plant is down, my old plant can be cranked up to serve them. On a good day when they need some green, I am the biggest green player in town. And because of that, then the second aspect I want to talk about is that then this import they're talking about. If I'm saying that, "Oh, look, it's still too expensive relative to my domestic generation." Why am I talking to all these people? Eventually, it will come. Eventually, there will be enough customers who pay for it. We are positioning ourselves to a full court press. So when that comes, we are not left out. So Batam, people come and talk to us. Johor, people come and talk to us, right? And then Sarawak, Vietnam, all the sources are there. And when it comes, we are the ones with the customer. As long as we have the customer, I sign a contract with whoever is generating power upstream, it will underpin the financing for the upstream investments, right? And that contract has to be long. How many people have the ability to sign the long-term contract that will underpin the upstream investment in Singapore. So going back to what Chiap Khiong was saying, so there's that customer, what they want and how we select the customer. There's also why are we doing some of these things. It's actually to position so that then when it comes, right? Government is talking about nuclear. Maybe I shouldn't say that, but people are talking about nuclear. And if nuclear comes, we are also positioning ourselves to protect our market share and to find the best way to serve our customers if it does come. So we have all those. So part of the decarbonization solution that we spoke about, right, we're trying to at -- by investing in option type costs, maintain that possibility that if it ever comes, we are in a position to not be left out, if not be in the lead. So -- but today, in the planning horizon that we talk about when it comes to earnings forecast and so on, I wouldn't worry about imports. I wouldn't worry about nuclear. I wouldn't worry about hydrogen. right? Renewables, yes. Gas, yes, for Singapore. And then for places like India and Australia, coal remains a very big factor.

Yes, just a quick question from me. This is Terence from JPMorgan. I just wanted to ask about Wilton. Thank you for sharing on the data center slide. But I wanted to ask what's the monetization opportunity for Wilton given. Potentially, it could be powered up by 2028. How are you looking to sort of monetize that? And would -- and should we expect some power sales by '28 for Wilton?

Yes. You want to speak? Vipul, please. So Vipul, President CEO, Renewable West, but he looks after the U.K. business as Executive Director of the business. So -- and he's quite close to the situation. He's chairing the steering committee with the U.K. team every week to advance the U.K. data center agenda.

So in terms of monetization, there are multiple sort of revenue streams that can come out of this. One quite simply is -- it's called powered land. And the reason Wilton has that opportunity is because it is actually one of the few sites that in this time frame, as Kim Yin already said, can actually offer a combination of grid power, local generation. As you know, Wilton has the largest private wire network in the U.K. and backup power. So -- which obviously, if you're a data center builder, developer, or operator, that's a very, very -- that's the first step. So that provides one revenue stream. Of course, if you look at what the values of those are with the scarcity of powered land availability, even outside the London area, of course, that's quite an attractive opportunity. I think the second is to provide power to that -- to any data center where there would be some monetization of the supply of that power, which would -- one option is bring it through the grid and then supply it through our network. There are some margins that come with that one. And of course, longer term, it would be quite sensible to build behind-the-meter generation within Wilton itself. We haven't planted in Wilton for many years, but this opportunity then opens up that -- those options. And so those are the 2 very straightforward power-related ones. And then, of course, there's -- powered shells will get built, et cetera, et cetera, that is -- which is potential.

That's very clear. If I could also ask, EMA is running RFP for new planting. Is Sembcorp potentially interested in participating in any of the RFPs for new plants?

I think in relation to the -- and I presume you are referring to DC-CFA2, right?

Not just the new planting for EMA. The new power plants.

The new power plants for EMA, which is the ones in 2031.

We are in the best position to address the power needs of the country. So like I don't want to answer your question. I hope you understand it's a little bit sensitive, but we are in the best position to address the next increase in the demand and when the government -- I think there is a trust between government and us when it comes to addressing the immediate as well as future power needs. So we will do what is good for the nation and also for ourselves to address those immediate needs.

And since we are on it, then could you discuss about the DC-CFA2 process? And how is Sembcorp participating in that?

I think the honest answer is that for DC-CFA2 specifically, we are clearly not participating it from a DC perspective. But the DC-CFA2 does require the DC operator to submit with an accepted a power -- grid power solution and offer. We are quite pleased to say that most of the DCs that have submitted for that have accepted -- have submitted with our power offer. So it is our expectation that we will be powering most of that capacity unless it gets all awarded to somebody else. But the reality is that we do feel that we are in a good position for that. Yes. But for now, it is really a power offer. And we have not -- we have no intentions of being involved in the DC construction for the DC-CFA2.

Pei Hwa, please?

Pei Hwa from DBS. Maybe a first question on India Renewable for Vipul. I think the grid bottleneck has been an issue. I just want -- there's been more news flow recently. So I'm wondering if that has become more concerning in terms of grid infrastructure bottleneck, especially with the influx of new capacity.

I think at an overall level, you're quite right, the grid has not been able to keep pace despite massive expansions in the grid. As I had mentioned in our last briefing, there are new policies on the anvil to actually give the grid developers a lot more power to acquire land and clear the bottlenecks. Now that's at the overall country level. If I look at our portfolio, which is more relevant, the -- our curtailment levels are less than 1%, and that's on our operational portfolio at the moment. So I think we are in good shape, and there are rules in place that allow compensation if there is grid curtailment for any reason other than grid security. Now, then the question comes, okay, we are building out close to 4 gigawatts, of which 2.5 gigawatts has signed PPAs and 1.5 gigawatts we are in the process of going ahead and trying to confirm those. So what happens to those? I think this is where it's worth noting what our strategy for project development is versus perhaps what many others in the industry do. Our objective is to increase electrons sold, not just rack up capacity commissioned. So what we do is we keep a very close eye on when the grid is likely to come, and we time our project commissionings accordingly. Why is this important in India? Because the way the rules work for the generalized network access or GNA, if you come before your authorized date of network access, you could get connected because there's always some way to move the power through some route or the other, but you get what is called a temporary GNA, TGNA. If you're on temporary GNA, the grid has no obligation to take your power. They take it on a best efforts basis and therefore, can curtail, which is why you may have read some very alarming numbers. I think there was a 43% curtailment number for some players in Rajasthan a few months ago. That's because they're on TGNA because they built their plants before their permanent GNA was ready. Our strategy is to time it to the best possible to come within a month or 2 of our permanent GNA. Therefore, once that happens, the grid is obliged to take our power even if it means backing down anyone else who might be on a temporary GNA at the time. That's how we are managing this.

One more question on India Renewable. Given the first half is relatively weak because of the weather pattern, I'm just wondering whether this has any implication to our IPO. What's the time line now? And any change in that?

I'm going to hand it to Eugene to answer.

Yes. So I think the -- again, like I've always said, I've been read the right, somebody is staring at me. But in any case, let's call it capital recycling, right, and not refer towards like the 3 letters that you pointed out, right? It's sensitive. Now -- but of course, I think you have heard me mention before, we are always gearing up towards a capital recycling exercise, putting all the necessary preparations in place. Now the war started, you create some volatility in the market. I think what is positive for us is that if you look at a recent performance of India Renewables listed. Of course, just because they're listed, it doesn't make any reference to the exact mode of capital recycling, okay? But because they are listed and they are performing fairly well. I think some of the recent performance include CleanMax has now recovered over its IPO price. Also a recent listing at Juniper. I think we saw a huge coverage of the book, almost 6x.

26x QAV. About 6, 7x overall.

Yes, on the books. So it gives a lot of indication that the capital recycling exercise is actually good. So you would imagine that we will be gearing towards a capital recycling exercise. I think in terms of timing, it's quite difficult for us to guide you, but you would imagine that we are certainly putting ourselves in a position to take advantage of the momentum that we see in the market.

Maybe to supplement Eugene's comment. It's not just CleanMax and Juniper. All the listed entities in renewables in India, which maybe this time last year were languishing somewhat, they are all at much better levels today. And of course, you would know that. I think what I'd like to add is the reason why. If you're looking at just delivery of projects that were promised and so on, a lot of that has come along. But more importantly, with the Middle East situation, we are actually seeing a very strong push for generation capacity additions in India, supported by policy, particularly wherever there is local resource. So what are the local resources for India? There's coal, there's renewables. So these are the 2. Hydro is, of course, there, but that gets capped out at a certain level given the rivers and so on. So there is actually a very strong sort of policy push and perhaps that's putting tailwinds into the market. And the only other thing I just -- maybe it's worth mentioning is that, obviously, we'll factor that into all our assessments and valuations of what we do. But does this materially affect our plans one way or the other? For us, we are quite clear that we now have a strong portfolio geared towards growth. We have our connectivity 100% secured. We have a very large proportion of our land secured as well. We now have 2.5 gigawatts of signed PPAs, which are now going into construction. We have 1.5 gigawatts of awards, which are still very much in discussion to try and convert into contracts. So that agenda has to get done, and we factor that into our calculation.

Just as a reminder, Pei Hwa, it's in reference to a capital recycling exercise, yes.

Yes, just to continue on that topic. I just wonder what other asset of business that we may consider to capital recycle, firstly. And then also a bigger scheme of things, I mean, shareholders are happy to see you increase your dividend. At the same time, we're also doing deleveraging. And how should we think about our M&A, our growth forward is more on the bigger things.

Yes I think, Pei Hwa, in relation to that, right, we are calibrating -- I think our outlook when we look further into the next 5 years, we are quite careful to ensure that we are in a position to capture growth. I think that will always be on our agenda, right? But we are also of the view that we have to be very focused on capturing growth along key themes that Sembcorp has the right to play. And also thematically, we are comfortable that there will be a trend that would be a secular trend that will transcend a fairly long period. So I think some of these themes that you would imagine would be, okay, number one, clearly looking at a growing power provision to growing AI and data center demands, right? So that will be one key theme that we'll be playing into. Now I'm going to talk about in broad themes because I don't think we are at a point where we can really talk about specific capital allocation, right? So I'll talk about broad themes. So power into a growing AI/data center thematic. And of course, through that, Sembcorp does have a very strong right to play because in many of the markets that we are in, right, they are actually attractive to many of these AI and data center players. And we're talking about Wilton, which fingers crossed imminent, right, for power land. We already have a plot of land secured in Vietnam that is already data center shovel-ready towards RFS, Batam and of course, Australia now with Alinta already in the portfolio, and we are getting very strong request inquiries. So -- well, I don't use that word, but looking at growth along these strategic themes are important. Others will obviously be along the tailwinds of what we have always done well. I think we are in the theme of energy transition. So continue to be focused on allocating capital for the purpose of renewables growth is also important. But we'll be very careful of the markets that we are in. And right now, clearly, India is a key bright spot for that. And the capital recycling exercise will give us access to a well-priced cost of capital to allow us to continue to grow there, right? And then other key themes will be, of course, Australia. I think Australia power fundamentals and also increasing demand, as Jeff has pointed out, coming through from the AI thematics will also allow us to continue to grow there, right? And then we also see the possibilities of looking how we could expand our LNG networks to take advantage of the core baseload markets that we are in. So this will be some of the key growth themes that we will still be looking at it. Of course, if we drill down to our capital allocation thoughts, we have to be very selective, right, because the key goal ultimately is to be able to accrete our ROICs and ROE, right? So we will be taking that lens towards that. Now then, when we flip into the other key theme of capital management, I think we are quite comfortable to say that when we look at the base, the cash flow generation that we have, right, we would be very comfortable over the next 5 years to say that in the base case scenario, we would be more than ready to be able to delever the balance sheet, right, naturally. Now then the speed at which we delever the balance sheet, of course, will be informed by the specific opportunities we see along those growth themes. But in general, we will delever the balance sheet. Now then in light of being able to delever the balance sheet, then are we able to increase the capital -- sorry, the cash flow returns to our shareholders. And we see an opportunity for us to do that quite comfortably actually, right, that we will be able to -- we have the capacity, right? I don't want to commit too far forward on any payout ratios or so, but we do have the capacity to quite comfortably catch up with our peers in a reasonable time frame. Now you have always heard me talk about this. The cash cost of dividend increase to us has not -- has always been low, right? Every cent of dividend increase, you can do the math, is a $70 million increase, okay? And the reality is that from a funding perspective, we have always have a lot of cost of capital advantages in terms of our debt as well as our long-term bond capital markets. For example, we funded Alinta, right, close to SGD 6.5 billion of total debt on balance sheet plus new debt, right? And we are able to average down our cost of borrowings, right? We have funded SGD 6.5 billion using a 3.4% cost of capital. So because of that, we do have -- we don't have a large equity base in terms of our funding, right? And hence, our ability to grow cash flow returns back to our shareholders is not very demanding from a cash flow standpoint, right? So I think when you put that into perspective, I think the goal would still be to pursue growth, right, along those key themes, but be very careful in terms of how we are focused on accretion on our ROICs and ROEs. And yet with the cash flow generation ability already in the balance sheet today, we still see the possibility of deleveraging and yet increasing our dividend.

So Eugene, Pei Hwa was asking about how else one might recycle, right? And you spoke about the purpose at the end of the day is to access capital if we need it so that you can recycle, right? Because as we grow, we become bigger and we're in a capital-intensive industry. So you want to be able to access capital so and to enable the growth, right, without having to come back to shareholders to ask for capital. But the other purpose could be also to access a high valuation opportunistically when the opportunity arises, just like in the case of, potentially India, right? So -- but what other things inside the Sembcorp portfolio that can be open for recycling? Is it your IUS portfolio, your -- the ready-built factories, recurring cash flow? Is it the gas portfolio in Singapore? Is it the Alinta? I think she's asking for...

I think to put it very circumspectly, right, there will be a range of capital recycling options, okay? And to put it very bluntly, everything is available for capital recycling from an asset perspective, right? So it will always boil down to what is the cost of capital I'm able to achieve, right, in the capital recycling exercise versus the use of proceeds. So I think within the IUS perspective, you will notice that I don't speak a lot of capital -- significant capital. incremental capital deployment into IUS because in the particular LOB itself, we see many capital recycling opportunities. I think one of the key things is that for the water portfolio, exiting lower returns municipal type plants and then redeploying it or increasing capacity to organically grow our industrial water plants is there, right? I think in the urban business model, it is already, to a certain extent, self-capital recycling, right, in terms of the land bank. And also as we build up the RBFs, we are already looking at the possibility of capital recycling some of the already built factories and really built warehouses ahead of time. So that's for IUS. I think on a broader team, more across the renewables portfolio, we will selectively look at the capital recycling. I think at China, even given its situation right now, it is always a target that we'll look at for capital recycling. I think more broadly, across Australia, because of the significant opportunities that we see, right, we will have to think of structures to fuel growth, right? And many of these capital recycling opportunities will probably come in the development of the renewables portfolio. We certainly may not see the need to hold 100% of the equity of the renewables portfolio as long as we have the electrons for distribution, right? So that's one possibility, right? And as we look at the possibilities of scaling in assets as a result of AI-driven growth, then we will look at capital partnerships for capital recycling as well. So I think more broadly, I would characterize it that way.

Yes. So again, we are very clear what is the purpose, right? Are we divesting for managing exposure? Are we divesting to recycle capital? Are we trying to access capital? Or are we trying to access valuation? So we -- the purpose of doing it will be very clear. And then the short answer to your question is that actually, the -- we are here to manage value. So to the extent there's an opportunity, we will -- we are open to all those possibilities. So Eugene described a wide range of it. And I'd be very happy to hear your feedback as to whether or not you think the -- especially analyst community, when you look at so many other peer group and you look at us and then say, which are the ones that we can think about, we're very open to that suggestion. We took a long time to answer that. I saw hands from the back, so we need to...

I'm Sharon See from The Business Times. I just have a follow-up question on capital recycling actually. Specifically in China, you highlighted that some regions remain challenging like Hunan and Ningxia. Are there any plans to divest the underperforming assets there? I think in the previous briefing, someone also asked if there's any impairment risk? Like what's your assessment of that? Also wanted to ask a second question about DC-CFA2. You mentioned that you are involved in supplying power to some of the applicants. Are you providing purely gas solutions? Or are you also involved in providing the green component that's mandatory like biomass? And if it's biomass, could you share a bit more color on like where are you procuring your feedstock from and what type of biomass? I have a third question on power import projects. So you have conditional approvals now for the Johor one that was just announced and also for Sarawak and Vietnam. Do you have any time line on when the CAs will progress to conditional licenses? And you mentioned that the costs are very high and Sembcorp also has experience in this import business with the ENEGEM project like -- so given your experience, what breakeven time line do you expect on these projects? Yes, especially for the Johor one since you are developing your own floating power plant and then also for the others?

First, China. When things are not going well, generally not the best time to sell, right? You'll be selling it at a discount. And do we need the cash back? We don't, right? I just told you that we have strong cash flow and all that. So if somebody comes along with a proposition that can help to enhance value with a merger or something like that, that's a possibility. But the short answer to your question is that I don't think it is top on the priority list to sell China now, right, especially we have a not a very good first half in terms of resource. We are experiencing tariff reform. We've still got curtailment that we expect with the build-out of transmission liquid ease. So we are not in a hurry to do something like that when there's no gun to the hit. So that's China, if you ask me. But we are managing it carefully to make sure that we have as much as possible, matching cost structures to the revenue structure, right? And that's something that we will continue to do and also to make sure that the assets remain in good condition. And so that then when the right time comes, then we can consider. But today, since you are from BT, I expect they'll be writing something. So if you have to quote me, I would say that we are not -- selling China is not a priority in the immediate future, that means the next 6 months. In terms of the DC-CFA, I'll ask Eugene to help me. Power import in terms of the timing -- and again, I think the -- I don't have a fixed timing in mind. These projects have their own life in terms of the -- it takes on its own life. That's the right way to put it. So what we want to do is to make sure that we are ready when the stakeholders are ready, right? But today, what I've said just now, I stand by is that today, what is being talked about as the power price, we do not see a match between what is the cost from upstream matching the cost or the matching the desire to pay from the downstream, which is our customers. So in other words, we are standing in between and we're saying that, "Look, we will be talking to upstream exporters, right?" We are the importers. Exporters are telling us this is the price that they need in order to sell the power to us. And when we look at our customers downstream, when we talk to them, they are not willing to pay the price that is being demanded upstream. So we -- again, if you have to quote me, you will be -- we have to wait for the right opportunity whereby there is a matching between the upstream and downstream expectations in terms of price, right? So -- and then how long it would take, I do not have a crystal ball to address that. I'm sorry about that. But what we want to do is that -- we think eventually it will come, and we want to position ourselves to be there when the conditions are matching. DC-CFA?

I think on DC-CFA2, clearly, if you look at, in general, the requirements of DC-CFA2 -- or maybe I'll ask Chiap to help me answer that.

I think the question is whether we just offer the green -- the gas, no, it's a bundle. So as you know, we also issued bio-methane pilot scheme. We have also the whole suite of other things in the green part. So as a proposal, depending on the customers, we do customize all the green solutions together with gas for customers' needs, yes. Yes, it will be important. And in our scheme that we have submitted is actually from different sources. We are still working on the sources.

Thank you very much. I'll just take several online questions. Most of them have actually been answered through the questions raised by the analysts as well. But in terms of the Gas and Related Services segment, there's a question on the assumptions behind the higher net profit for the second half of this year for GRS. Is it because of the start-up of the new 600-megawatt plant? And also what's the rationale for acquiring a 20% stake in Aster Power?

You want to...

Yes, I can answer the first question. Thanks, [ Yuan Long ], for that question. I think the first thing first is that we can't think of our Singapore gas business as, okay, we are adding in a new a plant and immediately, there will be a step-up of earnings that will come because it comes a contracted -- a new contract that comes with the plant, right? We have to see it as Singapore has a strong portfolio of contracts ranging from very long term to short term, and we will have a generation fleet. And then the generation fleet will then fulfill those contracts in the best way that we can together with our gas portfolio. So that is the right way to think about it. So in the second half, as the CCP 4 comes in, how does it add to the portfolio? So I would say, number one, there will be a heat rate efficiencies. So you would imagine that we would be running the CCP 4 at base load. And hence, as a result, the hit rates that we will be able to achieve is lower. It's almost 10% to 15% lower compared to the current F-class machines. So that will translate to a better -- more efficient cost usage for the purpose of generation. So that's one element. The second element will be, if you recall, early on, I mentioned that we will enter into second half with higher contract levels, probably about between 100 to 200 megawatts more, right, for Singapore. So these are contract levels that we'll be generating for that was not contributing in the first half. So the higher contract levels on the contract side of things would also help to improve the profits. And the third thing is, you also have heard me mention earlier on, we have excess gas coming into our second half, which means that we have more gas than our contracted portfolio, right? So with that and the CCP4 currently in the portfolio, we do have additional generation capacity for us to optimize the excess gas, right? And our options are to do that, which we were -- was not there in the first half, was to either generate more than our contract levels into the pool if the spark spreads make sense or we could monetize the gas by selling it if the implied margins spark spreads make sense. So it's a combination of these 3 elements, which was not there in the first half that will essentially drive our second half to have stronger profits than the first half.

And above and on top of that, the -- of course, we just told you that in July, we are seeing the spark spreads increasing, right? So multiple dimensions, some are locked in or we can count on, some are market related, but we are quite confident that all these things, a good part of it will come through. Rationale for acquiring 20% stake in Aster is very simple. As part of that, they are signing us with exclusive gas supply contract that -- a contract that we're very happy with. So the gas supply contract is a very -- it is actually the important part of the deal.

Two other questions on Alinta. The guidance is for $100 million contribution in terms of net profit for the second half. What proportion of the earnings are anchored by long-term commercial contracts versus retail contracts? And then in terms of the Alinta completion, have you identified which renewable projects you'll be pursuing over the next 12 to 24 months?

I think why don't I answer question 16, the second one, and then I'll ask Jeff to answer the first one, okay? So I think in relation to the renewable projects that we will look in the next 12 to 24 months, well, some of this is already publicly known in Alinta's own press release. We would be looking at a 100-megawatt or 212-megawatt hour battery at Wagerup, like there's one. We will also be looking at another BESS project, which is the Reeves Plains 1. And in addition to that, you would have also seen in Alinta's press release that we have actually signed a long-term PPA with Watercorp, right, which will underpin a wind farm that what we call the Marri Wind Farm close to 500 megawatts. So that will be developed as well. I think from a COD time line, the Marri Wind Farm probably won't be in the next 12 to 24 months. But essentially, this will be the key projects that we will be looking at.

I think I just want to also caution that Atlanta is a big portfolio, right? So each of these businesses or these projects, some are committed, some are not. And that we want to -- as much as directionally, we are there to support the growth and the energy transition of the business as well as of Australia. We will be evaluating each one of these projects on a stage-by-stage basis. So that's something that I thought I need to be clear about in case. I don't want you to be -- just based on what we're seeing here, then start to build all these things into your model with the full CapEx and then with some earnings and so on. We will go through that in stages. And just like in the Singapore portfolio or elsewhere, we will inform you when the key milestones are reached. Just like we won the bid for Taweelah C. We signed a contract for Taweelah C. Along the way, we will announce it, right? So this -- but I think what Eugene is confirming is these are projects that are in the pipeline, right? And that it's one of the reasons why, when we looked at the investment into Alinta, we know that they have a strong pipeline that we can come in to support.

Okay. Then the question that we will ask Jeff's help on is to -- in relation in the second half for Alinta's core earnings, how much of those earnings is anchored by long-term or retail or commercial contracts versus basically taking spot volatility in the spot markets.

So the short answer is predominantly all secured for the next half. So either through customer contracts. So we don't have any major renewals coming up in that period. So customers are secured away. We continue to receive payments, capacity payments, for generation that we have in the West, and our portfolio is predominantly hedged for that period as well. So the outlook, I would say, from our perspective is quite secure.

And Jeff, if I may, just to clarify because you can't see the question here, but the question says that are these long-term retail commercial contracts. And I think the nature of the contracts in Australia in the case, they are -- none of them are like 10 years, right? They are all sort of in the 3-year range, 2, 3 years.

1 to 3 years -- so the average duration in the book would be approximately 2 years on average, made up of 1-, 2- and 3-year contracts with the exception. Eugene spoke about the PPA with the Water Corporation. If we go ahead -- and that's conditional on us building the Marri Wind Farm. So if we get to FID on that, the PPA will be for 15 years. So that will be a bit of an outlier.

Right. So for the second half of the year is covered by contracts, right? But these contracts, they are of a 2-, 3-year tenure. So just to be clear so that -- okay. Thanks, Jeff.

There are no further questions online. We'll take one last question from the floor. [ Tawi ], thanks for your patience.

Tawi from The Age Singapore. I have 2 questions. Firstly, relates to the Alinta loan. With the Australian dollar rising, how does it impact financing costs? Secondly, relates to Wilton U.K. I understand it is still very early. You are still doing the proposals or bidding. But of course, before you decided to pivot, I'm sure you all have calculated what are the returns. Could you share some insight into what are your calculations?

I think I will -- on your first question is in relation to the -- basically fixed versus floating of the Alinta financing, right? So when we look at the Alinta financing, SGD 6.5 billion, close to SGD 4 billion of that is really and then the remaining is in Australian dollars. So you're right. I think in general, we have seen base rates in Australia rising. So we -- our inclination is to hedge the Australian dollar base rates so that we don't take a lot of base rate risk in terms of the Australian dollar funding. On the Singapore side, we are taking a more balanced view, right? Because when we look at the Singapore SORA, it has been fairly benign. So we are basically looking at our options in relation to hedging off our Singapore base rate exposure. given the fact that it is benign. So -- but in general, we still prefer more fixed than the floating. But of course, we will be quite judicious in how we approach hedging the Singapore dollar portion. So that's the question on hedging.

Wilton returns, because it is an existing site and it is existing assets that we're leveraging on, suffice to say that the returns will be very high, right? Because the book value written down is already written down to very low levels, right? In terms of new investment going into it, it will obviously have to make sense before we will put in any new investments. But when we talk about 280 megawatts of powered land that is ready by 2028, it is through the transmission grid and the substation that is really there. So with the chemical customer having vacated the land, the transmission capacity is still there, right? So not much additional investment has to go in, right? So what we're doing is that we're selling the land together with the transmission capacity if the customer comes along and offers us the right terms, right? So in that type of scenario, because of the lower investment going in, in the front end, the return should be very, very high because the denominator in your return calculation is small. Now having said that, this will be the first phase. And we obviously have the ambition to go further beyond the Phase 1, right? And if the right customer comes along, as I say, then the Phase 2, in order to serve the customer need, we would need to involve new investments into new power plants and so on and so forth. But that is a happy situation, frankly. And we are taking it a phase at a time. So right now, Phase 1 is shovel-ready -- borrowing Eugene's phrase, shovel-ready powered land, very rare in the U.K., and we will take advantage of that in order to secure a longer-term future for the sites. You're not taking further questions, right?

No more.

I think it's a bit late. Thank you for your patience. Before you go, if you just have to remember 1 or 2 things coming out from this session. I think for us, at least my own lens is that the highlight for this season is actually first, the Alinta, right, the completion smoothly for Alinta and then having seen it contributing to the group's earnings base. And the second thing is that the second half, we are -- we see all the catalysts and all the reasons why we are very confident about the full year being good, right? So the second half will be much better than the first half. So that's something that we described all the things that we mentioned to you just now. And that anchors the confidence that we will continue with our commitment to sustain the growth in our dividend even while we deleverage, right? So Alinta, second half as well as sustained dividend growth for deleveraging. So those are the few things that I would offer as the takeaway. Certainly, something that I would like you to take away from this session. So thank you very much.

Thank you. This brings us to the end of today's presentation. Thank you very much for joining us again, and we wish you a pleasant day ahead.

Are you serving lunch. So there's some buffet out there if you're hungry.