Sembcorp Industries Ltd (U96.SI) saw its stock soar by 5% in Tuesday's pre-market trading, as investors reacted positively to the company's recent announcement of a substantial dividend increase. The energy and urban solutions provider has demonstrated its commitment to shareholder returns despite facing mixed financial results.

The surge in Sembcorp's stock price can be attributed to the company's decision to significantly boost its dividend payout. For the 2024 fiscal year, Sembcorp hiked its final dividend by an impressive 112.5% year-on-year, from S$0.08 to S$0.17 per share. This increase brought the total dividend for 2024 to S$0.23, representing a substantial 77% jump from the S$0.13 paid out in 2023. This move has clearly resonated with investors, driving up demand for the company's shares.

While Sembcorp Industries reported mixed financial results for 2024, with revenue falling 9% year-on-year to S$6.4 billion and net profit remaining flat at S$1 billion, the company's leadership remains optimistic about its future prospects. CEO Wong Kim Yin stated that the significant dividend increase signals management's confidence in Sembcorp's long-term performance and ability to generate sustainable returns. Furthermore, the company has announced a strategic reorganization along with planned initiatives aimed at propelling Sembcorp to greater heights, which may have contributed to the positive market sentiment and the subsequent stock price increase.