More challenges in the offshore and marine industry await Keppel Corp, but the conglomerate can count on its diverse business lines for resilience and growth.
That was the new-year message from chief executive Loh Chin Hua yesterday as he urged his colleagues to "waste not a good crisis" to build a stronger company.
Keppel's performance has been closely watched as falling oil prices have belted Singapore's rig-makers and offshore marine service firms. The corruption scandal surrounding its Brazilian client has not helped.
Keppel's net profit was down 43 per cent year on year to $641 million in the nine months to Sept 30 last year, with earnings in the offshore and marine unit plunging 69 per cent to $167 million.
"Despite the recent spike in oil price following Opec's decision to reduce supply, we expect the winter in the offshore market to continue for some time," Mr Loh said yesterday.
While Keppel's offshore and marine unit "soldiers on", the group is primed for the opportunities in sustainable development presented by Asia's rapid urbanisation, he added.
"The Keppel group is well placed to provide solutions to meet the growing demand for energy, water, clean environments, good urban living and connectivity."
Keppel's property arm, Keppel Land, has recorded strong residential sales in China and Vietnam. Activities in these two markets, along with Myanmar and Indonesia, have been ramped up while divestments, such as September's sale of stakes in Lifehub@Jinqiao in Shanghai, have also boosted returns.
The property business was the group's best performer in the first nine months last year, with net profit rising 20 per cent year on year to $351 million. Keppel's strong position in the infrastructure sector was highlighted by last month's announcement that it will design, build, own and operate Singapore's fourth desalination plant. The plant will be operational in 2020.
"In 2016, the group's data centre business increased its footprint by more than 45 per cent in terms of net lettable area, by entering or expanding in markets such as Hong Kong, Italy, the United Kingdom and Germany," said Mr Loh.
"Keeping pace with the increasing importance of e-commerce, Keppel Logistics acquired a stake in a Singapore-based e-commerce fulfilment company, Courex, to build complementary capabilities in this growing and highly competitive business."
He added that creating synergy among its individual business units will also be one of Keppel's key priorities, following the collaboration between Keppel Capital and Keppel Telecommunications & Transportation last year to set up private equity funds targeting data centre investments.
"We will continue to look for ways to deepen collaboration and hunt more effectively as a pack."