Keppel T&T's profit falls in first quarter

Keppel T&T is one of the leading Singaporean logistics service providers in China, with operations in five cities, including Foshan (pictured), Guangdong. It says the slowdown in China is posing challenges to its logistics division.
Keppel T&T is one of the leading Singaporean logistics service providers in China, with operations in five cities, including Foshan (pictured), Guangdong. It says the slowdown in China is posing challenges to its logistics division.PHOTO: KEPPEL CORP

Data centre division doing well but logistics unit hit by slowdown in China and S-E Asia

Lower contributions from associated companies and higher taxation sent first-quarter earnings down at Keppel Telecommunications & Transportation (Keppel T&T).

Net profit for the three months to March 31 came in at $13.3 million, down 15.6 per cent from the same period last year.

Revenue grew 0.7 per cent to $48.3 million, on higher sales from the data centre division.

This was offset by lower turnover from the logistics unit, said Keppel T&T yesterday.

The logistics division's sales decreased due to lower warehousing and port operations revenue.

Earnings per share for the three months was 2.4 cents, down from 2.8 cents last year, while net asset value per ordinary share was $1.30 as at March 31, equal to what it was on Dec 31 last year.

  • AT A GLANCE

  • NET PROFIT: $13.3 million (-15.6%)

    REVENUE: $48.3 million (+0.7%)

Keppel T&T said the slowdown in China and South-east Asia continued to pose challenges to the logistics division's performance.

It also said that during the quarter, the division began operation for a "key fast-moving consumer goods customer".

The division has expanded its footprint in Singapore's healthcare sector with more contract wins. The projects under development in Tianjin Eco-city and Lu'an remain on track to start operations later this year, it added.

The data centre unit has "maintained healthy occupancy" at its facilities. Keppel Datahub 2 is undergoing its last phase of fit-out works and its net lettable space has been fully contracted, Keppel T&T said.

Construction has commenced for Keppel Datahub 3.

A Memorandum of Understanding was signed with the National Supercomputing Centre in Singapore to explore collaboration in supercomputing, networking and green technology, the firm said.

Keppel T&T also said it has been notified of Keppel Corporation's intention to consolidate Keppel DC Reit Management with three other units into a business trust management. Keppel DC Reit Management is wholly owned by Keppel T&T.

KepCorp aims to complete the proposed consolidation by the second half of 2016, Keppel T&T said.

Keppel T&T shares closed unchanged at $1.40 yesterday. The results were released after the market closed.

A version of this article appeared in the print edition of The Straits Times on April 15, 2016, with the headline 'Keppel T&T's profit falls in first quarter'. Print Edition | Subscribe