Keppel Posts Lower Profits

The Singaporean offshore and marine conglomerate Keppel Corporation reported a net profit of S$203 million (USD 150mln) for the first three months of 2019, 40% below that of S$337 million for 1Q 2018.

In 1Q 2018, the Group benefitted from a S$289 million gain arising from the en-bloc sale of Keppel Cove in Zhongshan, China as compared to gains of S$174 million in the current period from the divestment of a 70% interest in Dong Nai Waterfront City, Vietnam and the re-measurement of previously held interests in M1 Limited (M1) at acquisition date.

The Group achieved revenue of S$1,531 million for 1Q 2019, which was $61 million or 4% higher than that of 1Q 2018. The increase was underpinned by higher revenues from power and gas sales, infrastructure projects in Singapore and Hongkong, asset management and the consolidation of M1, offset by lower contributions from property trading in Singapore.

 Loh Chin Hua, CEO of Keppel Corporation, said, "The main pieces of our strategic transformation are in place. Our focus is now on execution. When we have successfully executed on our strategy, Keppel will be a powerhouse of urbanisation solutions, with not only higher profits, but also higher quality, recurrent earnings. We will work all our engines hard towards achieving a mid-to-long term ROE target of 15% for the Group."

The Offshore & Marine (O&M) Division registered a net profit of S$6 million for 1Q 2019, compared to a net loss of S$23 million a year ago, due mainly to a share of results from associated companies which turned profitable year on year, as well as lower taxes. The Division achieved a profit of S$3 million at the operating level for 1Q 2019, compared to S$8 million for 1Q 2018.

The O&M Division continues to pursue projects and opportunities in new markets and niche segments. In the year to date, the O&M Division has won new contracts of about S$1 billion, or 59% of the S$1.7 billion secured for the whole of 2018. The latest orders comprise a newbuild harsh environment semisubmersible for Awilco and contracts to upgrade a drilling semisubmersible and integrate an FPSO hull.