Conglomerate Keppel Corporation's latest quarterly results continued to take a beating owing to poor performance from its offshore and marine business.
Demand for drilling rigs has fallen though conversions and specialised shipbuilding have helped to bolster performance for the unit.
Net profit for the three months to Sept 30 dipped 12.4 per cent to $363 million, compared with the same period a year earlier, it said yesterday.
Revenue slid 23.4 per cent to $2.44 billion owing to lower contributions across all business units except its property business.
Despite the challenging global economic environment, as well as a slowdown in Singapore, chief executive Loh Chin Hua felt that the group's results are "creditable".
AT A GLANCE
$363 million (-12.4%)
$2.44 billion (-23.4%)
"They demonstrate our resilience as a multi-business conglomerate, not just a single-business company," he said at a briefing yesterday.
He maintained that this business approach is evident in KepCorp's results this year, which "may not be fully appreciated by the market".
The turnover of Keppel Offshore & Marine (Keppel O&M) slumped 36 per cent to $1.41 billion, owing to lower work volume and some project deferments.
KepCorp's infrastructure business also suffered a 30 per cent decrease in revenue as a result of lower revenue from the sale of electricity. The absence of revenue from Keppel FMO, after it was sold in the fourth quarter of last year, was also a contributing factor.
The drop in revenue was partially offset by a surge in property revenue, by some 122 per cent, to $487 million, thanks to higher contributions from residential projects in China.
Earnings per share slid to 20 cents from 22.9 cents a year earlier, while net asset value per share was $5.91 as at Sept 30, up from $5.73 as at Dec 31 last year.
Mr Loh said that Keppel O&M has acceded to requests for "slightly later delivery" of three jackup rigs from this year to early next year.
He also revealed that KepCorp is "hunkering down" in its offshore and marine business, trimming its overheads and improving efficiency.
Keppel O&M chief executive Chow Yew Yuen said that it has reduced 12 per cent of its direct labour and cut 19 per cent of its sub-contractor workforce in the first nine months of this year in efforts to "right size" its operations.
However, Mr Loh said that KepCorp does not intend to cut costs across the board.
"We will continue to invest prudently in training, research and development, and productivity improvements through the down cycle, and get ourselves ready to seize opportunities when the upturn comes."
KepCorp shares closed three cents higher at $7.29 today ahead of its results briefing.