Keppel's Q1 net profit down 20.9%

The net profit of mainboard-listed Keppel Corp fell 20.9 per cent to $160.5 million for the first quarter ended last month, mainly on the absence of the divestment of its 70 per cent stake in Vietnam's Dong Nai Waterfront City a year ago.

This translates to an earnings per share of 8.8 cents in the first quarter, compared with 11.2 cents a year ago. But its quarterly revenue was up 21.3 per cent to $1.86 billion, mainly as a result of higher revenues from offshore and marine projects, property trading projects in Singapore, the power and gas business and the consolidation of telco M1.

The topline growth was partly dampened by lower contributions from property trading projects in China, environmental engineering projects and asset management.

Keppel's offshore and marine (O&M) segment posted a net profit of $3 million for the quarter, halved from a year ago. The division's operating profit stood at $28 million.

During the circuit breaker period, Keppel O&M's yards continue to provide services in vessel repair, maintenance and overhaul, but with reduced manpower and precautionary measures in place. Most of the company's overseas yards are also operational with varying levels of restrictions.

Keppel O&M remains resilient amid the oil price shock due to diversification, the company said. Renewables and gas-related solutions accounted for more than 70 per cent of the division's $4 billion net order book as of the end of last month.

Meanwhile, net profit at the company's property division plunged 73 per cent to $35 million for the first quarter, due mainly to the absence of the Dong Nai gain and a tax write-back last year. For the quarter, Keppel Land sold 450 homes, about 15 per cent more than a year ago. China contributed over 70 per cent of sales volume.

Its infrastructure division posted a net profit of $174 million for the first quarter, more than 10 times that of the $16 million net profit the year before.

Given the work-from-home situation, Keppel Data Centres has received inquiries from customers on new data centre capacity; it is also exploring the development of a floating data centre park at the Loyang Offshore Supply Base in Singapore.

Keppel's investments division fell into the red in the first quarter, with a net loss of $52 million compared with a net profit of $49 million in the same quarter last year. This was due to the absence of re-measurement gains from previously held interests in M1 and mark-to-market losses on some investments.

Net gearing crept up to 0.88 times as of end-March, compared with 0.85 times a year ago. But with lower working capital requirement, its free cash inflow was $37 million in the first quarter, reversing the $534 million outflow a year ago.

THE BUSINESS TIMES

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A version of this article appeared in the print edition of The Straits Times on April 30, 2020, with the headline Keppel's Q1 net profit down 20.9%. Subscribe