Earnings at Keppel Corporation fell in the third quarter due largely to lower contributions from investments and property, offset by stronger performance in infrastructure and offshore and marine (O&M).
Net profit declined 15 per cent to $225.7 million in the three months to Sept 30 compared with the same period last year, it reported yesterday. Revenue was 20 per cent down at $1.3 billion.
Higher revenue recognition from ongoing O&M projects and increased power and gas sales were offset by lower contributions from property trading, asset management, as well as the absence of the sale of investments.
The O&M division registered earnings of $2 million, bucking three consecutive quarters of losses, on the back of higher revenue recognition from ongoing projects as well as higher operating profit.
Earnings per share for the quarter declined 15 per cent to 12.4 cents while net asset value per share was $6.30 compared with a restated $6.29 as at Dec 31.
Keppel recorded a net profit of $809.3 million for the nine months to Sept 30, 18 per cent up on the $688 million from a year earlier.
Chief executive Loh Chin Hua said the firm is pleased to have reversed the O&M unit's losses: "The team is working very hard to make sure this is sustainable.
"The hard work in reducing overheads is paying off. We are starting to see more enquiries. We are cautiously optimistic."
The infrastructure division achieved a net profit of $55 million in the third quarter, up 38 per cent, and an 8 per cent rise in revenue to $674 million, thanks to higher sales in the power and gas businesses, although this was partly mitigated by lower progressive revenue recognition from Keppel Marina East Desalination Plant project.
But other divisions turned in less sterling results. Its investments unit saw an 85 per cent plunge in net profit to $8 million due mainly to the absence of sale of equity investments reaped last year.
Property's net profit fell 6 per cent to $161 million while revenue dropped 67 per cent to $180 million.
The decline in contributions was due to the absence of turnover compared with the same quarter last year from some projects, including The Glades, which were all sold by December last year.
Keppel Corp shares closed two cents higher at $6.76 before the results were announced.