Chairman's Message 2020

Enabling a Safe, Sustainable City amid a Global Pandemic

The past financial year ended on an extraordinary note. The nation was faced with a global pandemic of COVID-19. However, Singapore has once again risen to the unprecedented challenge and we stand united, with everyone doing his or her part to build a strong pandemic defence. While the COVID-19 crisis poses challenges to our operations, our priority remains to provide reliable and efficient energy services to our customers round the clock and contribute towards a sustainable future for everyone while ensuring the safety of our employees.

Financial Performance

As we continue to invest in renewing and upgrading our network infrastructure, we ended the financial year with an asset base of S$20 billion, up S$425 million from last year and we were able to maintain a consolidated group net profit at S$1 billion. The stable financial performance is important for us to maintain our credit profile and continue servicing our debt, which in turn enables us to raise capital to fund network infrastructure and uphold power service reliability. 

During the year, S&P Global Ratings affirmed our AA long-term issuer credit rating by revising its outlook from stable to positive. The strong investment-grade rating has enabled us to have broad and cost-effective access to banks and capital markets to finance our maturing debts and continuous CAPEX.

We are proposing a final dividend of S$406 million for the financial year ended 31 March 2020. While our financials remain strong, we expect significant headwind in the present year and a longer-term macro-economic impact.

Standing Together with Singapore

In view of the challenges of COVID-19 on individuals and businesses, we implemented a series of initiatives to support our employees and the wider community. In recognition of the dedication of frontline officers and to encourage them during this period, SP made a special one-time payment of S$1,500 to about 400 of our frontline officers in April. We also continued to support the less privileged and matched dollar-for-dollar all staff donations to the SP Heartware Fund.

Together with industry regulator Energy Market Authority (EMA), we supported the government’s Resilience Budget 2020 measures to freeze all government fees and charges for one year. In line with this, we have deferred grid charges amounting to S$343 million and maintained our grid fee to customers. We have returned to the government and declined a total of S$41.6 million in Jobs Support Scheme payouts, which was meant to help companies retain workers and cushion the economic impact of COVID-19.

To support the set-up of thousands of units of community recovery centres and accommodation, the SP team worked within a compressed time frame to expedite supply connection to these facilities. 

We continue to render our team’s professional expertise and skills in ongoing initiatives to curb the spread of the infection and support mass public communication. We partnered with Temasek in trials and pilots on digital devices and applications that enable real-time contact tracing and monitoring of vital signs such as temperature, and facilitate extraction of data insights to strengthen intervention measures. Our call centre agents will continue to offer hotline services for ongoing initiatives for all households.

SP and our staff volunteers were part of a Temasek Foundation initiative to provide free hand sanitiser to all 1.5 million households in Singapore. Called #BYOBclean, which stands for Bring Your Own Bottle Clean, the aim was to encourage good hand hygiene practices. Our call centre managed the project’s public phone hotline, answering about 30,000 calls in three weeks. Our staff also volunteered in the distribution of the hand sanitiser at collection centres.

Staff volunteers distributed free hand sanitiser to the public as part of Project #BYOBclean.

The Board of Directors volunteered to take a reduction of our fees by five per cent for the financial year 2020/2021. SP’s senior management took a cut of one to two months of their performance bonuses for this financial year, which translates to eight to 15 per cent of annual base salaries, increasing in quantum with staff seniority.

Safety is our Highest Priority

Securing a safe environment for our customers, staff and contractors became even more important during the COVID-19 outbreak. We swiftly activated our business continuity plan and took heightened measures as we provide critical services for households and businesses round the clock.

While customers stayed home during the Circuit Breaker period, we kept the electricity and gas supply on. Key services including account opening and closing, and supply connection and termination continued as our customer service centre and hotline remained available. Our officers are on standby 24/7 to attend to any supply disruption.

Our officers don hazmat suits, goggles and face shields to turn on electricity supply at quarantine facilities.

To protect customers and our staff, we minimised physical contact, practised safe distancing and stopped sending our officers to customers’ premises to check their electricity, water and gas meters to record their monthly utilities consumption. The consumption for this period was estimated and adjusted in subsequent bills when manual meter readings resumed. Customers have been encouraged to send us their meter readings to be billed on actual consumption. We thank our customers for their patience and understanding during this period for any delays or inconvenience that they may have experienced.

We continued our journey to improve safety. We have enhanced our safety measures and stepped up inspections at all new installation and worksites. Our officers are equipped with digital tools to improve and standardise the safety inspection process. Using remote monitoring capabilities, we performed surveillance at over 200 work sites daily, ensuring compliance with our safety requirements. As we tightened our work processes, our senior supervising officers are on site to ensure works are carried out in accordance with established protocols in order to minimise the risk of human error.  These initiatives have contributed to an all-time low Lost Time Injury Frequency Rate (LTIFR) of 0.33 per million man-hours. This was ahead of our target of 0.57 for the year, and a 64 per cent improvement from the previous year.

Enabling Singapore's Progress through Reliable Services

Network reliability remains our key focus. Last year, customers experienced 0.56 minute of electricity interruption and 0.26 minute of gas interruption. To maintain Singapore’s position among the most reliable power networks in the world, we continue to invest in infrastructure, technology and engineering capabilities to uphold high performance standards.

Our long-term asset renewal strategy is based on the performance, condition and age of our equipment. As at 31 March 2020, we have installed and commissioned seven transmission cable circuits in our cross-island underground cable tunnels that were completed in 2019. These transmission cable circuits, spanning close to 138km, are part of our long-term plan to replace aging assets and to meet Singapore’s future electricity needs.

To enhance speed and accuracy in predicting anomalies, we have ramped up the implementation of online condition monitoring and remote switching capabilities, allowing for quicker restoration should a supply interruption occur.

Conducting checks on the gas regulators to ensure optimal gas supply pressure for customers.

As part of our accelerated gas mains renewal programme, we have replaced more than 70km of aging ductile iron pipelines with the more durable polyethylene pipes. This significantly reduces the risk of gas leaks and improves gas safety. We have also embarked on the upgrading of two key operational systems, for gas network monitoring and control, and to support all gas market activities in Singapore. The final connection of our transmission network in the north of Singapore was completed, enhancing the security and reliability of supply serving Liquefied Natural Gas (LNG) customers in the area. 

Enabling a Low-Carbon Future

SP is well-placed to empower our customers, homeowners and businesses alike, to do their part towards a low-carbon future.

In our sustainability review, we report on our initiatives and progress on meeting targets aligned with the United Nations’ Sustainable Development Goal 7 of providing affordable, reliable and clean energy for all. Our focus is on how innovation, customer empowerment and network reliability have brought us closer to this goal.

We have been supporting the full rollout of the Open Electricity Market and helped customers to switch and save. As at 31 March 2020, we have installed about 480,000 advanced electricity or AMI meters for businesses and households. With these meters, households can track their half-hourly electricity consumption via the SP Utilities mobile app; better understand their consumption patterns; and be more energy-efficient. All households in Singapore can expect to have AMI meters installed at their premises by 2024.

We are empowering our customers to make green choices using our platforms. The SP Utilities mobile app has new features like My Carbon Footprint that enables every Singapore consumer to monitor their carbon footprint and take action to lower it. Households can also use our GreenUp feature on the app to make sustainable choices in their everyday lives and earn rewards. Businesses can utilise our digital platform to trade in Renewable Energy Certificates (RECs) to offset their green targets. SP is the first authorised local issuer of International Renewable Energy Certificates (I-RECs) in Asia Pacific, a global accreditation that provides consumers assurance of the integrity of each REC transaction.

My Carbon Footprint enables users to calculate the carbon emission from their daily activities and take steps to lower it.

We are expanding our electric vehicle charging network across Singapore, in line with the government’s longer-term plan to build 28,000 electric vehicle charging points by 2030.

Our smart energy solutions enable homeowners and businesses, in Singapore and overseas, to enjoy energy-efficient cooling and heating. At Tengah, we will deploy Singapore’s first large-scale residential centralised cooling system that is up to 30 per cent more energy-efficient compared to conventional air-conditioning; offers energy and cost savings to HDB residents; and lowers carbon emission. In China, we have commenced operations at the underground district cooling system at Raffles City Chongqing in September 2019.

We are exploring new technologies to support the energy needs of buildings and districts. With 75F, a building intelligence provider harnessing the Internet of Things and machine learning, we are offering a micro-climate control solution that can save up to 30 per cent in energy consumption while improving occupant comfort. This solution has been deployed at DBS Asia Hub at Changi Business Park since February 2020. We have also set up Southeast Asia’s first zero-emission building at SP’s training centre at Woodleigh Park to explore the viability of using green hydrogen as an energy source.

SP’s training centre at Woodleigh Park is completely powered by renewable energy via a Hydrogen Energy

Enhancing Capabilities and Nurturing Talent

To equip staff with the skills for the digital age, we have committed S$35 million over the next three years to upskill our 3,600 staff. Our training programmes are targeted to further develop competencies in the areas of customer service, cybersecurity, data analytics, safety and skills for a digital workplace. This includes a S$4million investment to conduct more than 90 technical courses for about 1,000 technical staff as part of a comprehensive Skills Passport. Last year, on average, our employees underwent 9.25 days of training, which is 42% higher than the national average of 6.5 days.

A key driver of our upskilling efforts is Project FUSION – Future Skills In Everyone – a collaboration with UPAGE. Over the past two years, about 80 per cent of our staff have undergone skills upgrading through Project FUSION. As an extension of Project FUSION, we formalised a Company Training Committee in partnership with UPAGE in November 2019, witnessed by the National Trades Union Congress Secretary-General Ng Chee Meng.

We formalised a Company Training Committee in partnership with UPAGE, as part of our commitment to upskill employees for the digital age.

We continue to nurture engineering talent as they contribute towards efforts in meeting our reliability targets and sustainability goals. Currently, we have 111 engineers with Professional Engineer certification, the highest among companies in Singapore. Last year, we sponsored 180 employees for their higher education courses and offered 20 scholarships to future engineers for their tertiary education.

Strengthening Community Bonds, Rising Above Challenges

We have remained steadfast in giving back to society. In the past year, we raised more than S$1.7 million for the SP Heartware Fund, for programmes under Community Chest that help seniors from less privileged backgrounds. We strengthened bonds with community partners such as AMKFSC Community Services, Toa Payoh West-Balestier Constituency Office and TOUCH Community Services through regular engagements throughout the year. During this challenging period, we were able to ramp up our support to AMKFSC by donating masks so that staff at their centres can continue to serve the community. We also continued providing about 140 free lunches a week to seniors in Toa Payoh West-Balestier.

In the past year, we supported the Growing Together with KidSTART initiative for pre-school children. Our staff volunteered regularly with the KidSTART group in Boon Lay, helping to set up and run activities during each session. Collectively, our staff contributed more than 6,000 volunteer hours last year.

In Appreciation

I would like to place on record my appreciation to the following Board members for their invaluable contributions: Mr Tan Chee Meng, who retired on 31 July 2019; Mr Choi Shing Kwok and Mr Tan Puay Chiang, who will both be retiring on 30 July 2020. I would like to welcome Mr Lee Kim Shin and Ms Goh Swee Chen who joined the Board on 31 July 2019 and look forward to their contributions.

On 1 July 2020, Mr Wong Kim Yin was succeeded by Mr Stanley Huang Tian Guan as Group Chief Executive Officer. On behalf of the Board, I thank Kim Yin for his outstanding leadership during his eight years with us. He has transformed the group amidst an evolving landscape and embedded innovation and sustainability in the group’s DNA. I congratulate Stanley on his appointment as the new Group Chief Executive Officer. Stanley has been SP’s Chief Financial Officer since 2015. The Board and I look forward to working with him as he takes over the helm and leads the team in charting SP’s next phase of growth.

On behalf of the Board, I thank the management and staff for their sacrifice, dedication and commitment during this period. I am grateful to our shareholder, business partners, union and regulator for their continuous support. Thank you to my board members for their guidance and counsel.

As we tackle the exceptional challenges brought on by the global COVID-19 pandemic, we must brace ourselves to live and operate in a tough environment for some time to come. Standing united and working together, we will overcome these challenges and emerge stronger.

Mohd Hassan Marican

July 2020

Financial Statements