SINGAPORE - Keppel Corporation sank into the red in the fourth quarter ended Dec 31 with a net loss of S$495.8 million, reversing from a net profit of S$143.1 million in the same period a year earlier.
The net loss was largely the result of the one-off financial penalty arising from Keppel Offshore & Marine's (Keppel O&M) global resolution with the criminal authorities in the United States, Brazil and Singapore in relation to corrupt payments made by a former agent in Brazil.
The penalty, along with related legal, accounting and forensics costs, amounted to S$619 million.
Excluding this one-off cost, net profit would have come in at S$124 million for the quarter, 13 per cent lower than previously.
In its earnings report on Thursday, Keppel said that the weaker overall performance was also due to poorer operating results of its offshore and marine division, though it was partially offset by higher profits from Singapore property trading, as well as fair value gains from assets.
Revenue dropped 20.4 per cent to S$1.54 billion.
For the full year ended Dec 31, net profit tumbled 72.4 per cent to S$216.7 million, while revenue fell 11.9 per cent to S$5.96 billion.
The group logged losses per share of 27.3 Singapore cents for the quarter, compared with earnings per share of 7.9 Singapore cents previously.
Keppel chief executive Loh Chin Hua said: "The global resolution reached by Keppel O&M over past misdeeds in Brazil brings an end to what has been a painful chapter for Keppel - one that we have recognised and dealt firmly with. This is not Keppel. We care not just about results, but also how they are obtained."
Mr Loh said that the board and management had thoroughly investigated the allegations and dealt with the issues uncovered, as well as put in place enhanced compliance controls - including comprehensive training and certification - to prevent any repeat of such misdeeds.
"Our core value of integrity prohibits Keppel from engaging in any unethical practices or behaviour. This is absolutely clear to me as CEO. We will not tolerate any behaviour or action from Keppelites that deviates from this fundamental principle," he said.
"The board and management are determined to regain the trust that has been lost. We will win business legally and ethically, based on our collective strengths of superior customer-centric solutions and good track record of execution."
Keppel is proposing a final cash dividend of 14 Singapore cents for the fiscal year 2017, 16.7 per cent higher than the 12 cents declared for 2016. This excludes Keppel O&M's one-off financial penalty and related costs, which the group has said it will ring-fence when considering dividend payouts.
This brings Keppel's total distribution for 2017 to 22 Singapore cents per share, 10 per cent up on the 20 cents per share in 2016.
