A lower fair value gain on data centre investment properties and a smaller profit share from associates sent earnings at Keppel Telecommunications & Transportation (Keppel T&T) tumbling 93.1 per cent in the fourth quarter.
Net profit for the three months to Dec 31 came in at $3.1 million. Revenue slid 5.5 per cent to $49.7 million, largely owing to lower turnover from the logistics and data centre divisions, said Keppel T&T yesterday.
Net profit for the full year, however, rose 14.9 per cent to $105.1 million - helped by higher contribution from the data centre division, although partly offset by weaker contribution by the logistics division - while revenue dipped 3 per cent to $194.6 million.
The company has proposed a final dividend of 4.5 cents, up from 3.5 cents previously.
Operating profit for the quarter nosedived 96.5 per cent to $1.3 million, owing to lower fair value gain on investment properties and higher overheads, even though this was partly offset by the absence of impairment losses.
AT A GLANCE
NET PROFIT: $3.1 million (-93.1%)
REVENUE: $49.7 million (-5.5%)
DIVIDEND PER SHARE: 4.5 cents (+28.6%)
As a result, profit before taxation sank 87.1 per cent to $8.3 million.
Earnings per share for the quarter was 0.6 cent, down from eight cents previously. Net asset value per share stood at $1.43 as at Dec 31 last year, up 10 per cent on $1.30 as at the same time in 2015.
Keppel T&T said the outlook for trade and consumption in Asia remained challenging during the period, given the slow pick-up in China, weak recovery in advanced economies and uncertainties in the global macroeconomic landscape.
"These factors are expected to weigh on the logistics industry's prospects," it noted, adding that the logistics division will continue to focus on optimising resources to improve margins while seeking new growth opportunities.
Keppel T&T said growth in the data centre industry is "expected to remain strong with the proliferation of cloud computing, big data and digitalisation".
With the completion of the sale of 90 per cent of the shares in Keppel DC Singapore 3 to Keppel DC Reit, as announced on Jan 20, the division's contributions in the near term will primarily be driven by recurring income from its facility management and other services, alongside its efforts to improve occupancy at its new and existing data centres, it said. The division "remains optimistic" about long-term prospects and is "actively seeking to grow its asset pipeline".
Keppel T&T shares finished half a cent or 0.3 per cent higher at $1.765 yesterday, before the results were released.