Higher contributions from across all businesses other than the offshore and marine division sent earnings up 30 per cent at Keppel Corporation in the third quarter.
Net profit for the three months to Sept 30 was $291.8 million, higher than the $224.5 million in the same period a year earlier. Revenue climbed 10.8 per cent to $1.62 billion, Keppel reported yesterday.
The improved performance was thanks to higher profits from China and Vietnam property trading, and the power and gas, and asset management businesses, as well as the sale of investments.
These more than offset lower contributions from the offshore and marine division and associated companies, said Keppel.
Net profit for the nine months to Sept 30 expanded 11.2 per cent to $712.5 million, even as revenue slid 8.5 per cent to $4.42 billion.
During the quarter, the offshore and marine division recorded a 26 per cent drop in revenue to $380 million on lower volume of work and the deferment of some projects.
Turnover from the property division, on the other hand, rose 14 per cent to $546 million on the back of higher sales in Vietnam, though partly offset by lower revenue from Singapore. Revenue from the infrastructure division jumped 44 per cent to $626 million, while investment turnover rocketed 117 per cent to $65 million.
AT A GLANCE
NET PROFIT: $291.8 million (+30%)
REVENUE: $1.62 billion (+10.8%)
Earnings per share shot up 29 per cent to 16 cents, while net asset value per share was up 2.2 per cent to $6.56 as at Sept 30, compared with $6.42 as at Dec 31 last year.
Chief executive Loh Chin Hua told a briefing that the latest set of results continues to be underpinned by the group's multi-business strategy, which is "bearing fruit". Hunting as a pack is starting to show results, Mr Loh added.
"We are driving collaboration across the group to harness synergies, grow new business opportunities, enter new markets and capture higher value from all parts of Keppel," he said.
Contributions from the property business made up the bulk of the group's quarterly earnings with a 68 per cent share, followed by investments at 18 per cent and infrastructure at 14 per cent.
Mr Loh pointed out that Keppel Offshore & Marine has managed to break even, which is a remarkable achievement. He attributed this to the rightsizing efforts, undertaken since early 2015.
He reiterated that the offshore and marine business needs time before new orders for newbuild jack-up rigs come in, with continuing low utilisation rates and a large supply overhang in the jack-up market.
"In the meantime, Keppel continues to seek opportunities in other markets, including production assets, Jones Act vessels, as well as LNG-related solutions," he said, adding that Keppel has made significant progress in its gas strategy.
Mr Loh noted that the trend of rapid urbanisation is a key area where Keppel is carving a niche with its suite of solutions. The group will step up efforts to seize opportunities in this space with its newly-formed business unit, Keppel Urban Solutions.
He had also noted that urban logistics and data centres show good potential to be future growth engines for Keppel.
Keppel shares closed 1.5 per cent or 11 cents lower at $7.02 yesterday, before the results were out.