Keppel Corp posts higher Q1 net profit, with all business units profitable except offshore and marine

All key business units except Keppel Offshore & Marine were profitable.
All key business units except Keppel Offshore & Marine were profitable.PHOTO: REUTERS

SINGAPORE - Keppel Corp saw a net profit in the first quarter of this year that was "slightly higher" than the $160 million posted in the same period last year, although it did not disclose exact figures.

All key business units except Keppel Offshore & Marine were profitable, it said on Thursday (April 22) in a business update.

The group's revenue was also slightly higher at $1.889 billion in the first quarter of this year, compared with $1.857 billion a year ago.

This was mainly due to higher contributions from the urban development and asset management segments, offset by lower revenues from the energy and environment sector, Keppel Corp chief executive Loh Chin Hua told the media in a conference call.

Mr Loh noted that despite the offshore and marine unit being loss-making, its performance has improved quarter on quarter, with earnings before interest, taxes, depreciation and amortisation (Ebitda) for the first quarter of this year turning positive because of improving margins and productivity.

The unit has also operated at close to full capacity in the first quarter of this year with safe management measures in place. In Singapore, a workforce of about 19,000 has returned to the yards and offices, Mr Loh said.

"Keppel's business units made creditable progress in the first quarter of 2021 against the backdrop of a gradual recovery from the pandemic," he said.

In the urban development sector, Keppel Land's performance improved year on year over the same period, bolstered by higher contributions from China and Vietnam property trading projects as well as divestment gains, the corporation said.

Keppel Land's home sales in the first quarter of this year tripled year on year to 1,360 units, underpinned by stronger performance in China, Vietnam and Singapore.

The corporation has also continued to launch new initiatives such as the Bifrost Cable System, which Mr Loh said will grow its business in the connectivity sector and provide a platform to harness synergies across various business units.

In March this year, Keppel Telecommunications & Transportation (Keppel T&T) had announced an investment of $467 million in a joint build agreement with Facebook and Telkom Indonesia to jointly own and develop the subsea cable system.

The cable directly connects Singapore to the west coast of North America via Indonesia through the Java Sea and Celebes Sea.

Mr Thomas Pang, chief executive and director of Keppel T&T, said there are various ways to monetise such a cable system, including entering long-term leases with customers.

"As we have seen in one year of a pandemic, the digital push has accelerated," said Mr Pang.

"There will be more data produced and moved around, more traffic generated as well as more opportunities and a need to link up across continents. Singapore is a natural hub for the digital economy... this is a good start to bring in more opportunities."

Shares of Keppel Corp closed at $5.33 on Thursday, up two cents or 0.377 per cent.