The absence of gain from an earlier divestment and contributions from subsidiaries sold sent third-quarter earnings plunging by 81.7 per cent at Keppel Telecommunications & Transportation (Keppel T&T).
The logistics and data centre company reported a net profit of $12.8 million for the three months to Sept 30, well down from $69.9 million in the same period a year earlier.
It said yesterday that one-off gains amounting to $55.8 million were recognised in the third quarter of 2016 on the disposal of a subsidiary and adjustment for sale proceeds of data centres disposed, which were partly offset by an impairment loss on fixed assets.
Excluding the one-off gains, net profit would be down by 27 per cent instead.
Revenue slipped 3.3 per cent to $45 million, due mainly to weaker warehousing revenue in the logistics division and absence of revenue due to disposal of the 90 per cent and 50 per cent interest in Keppel DC Singapore 3 and Keppel DC Reit Management.
AT A GLANCE
$12.8 million (-81.7%)
$45 million (-3.3%)
Net profit for the nine months to Sept 30 was down by 66 per cent to $34.6 million, while revenue shrank 8 per cent to $133.3 million.
Operating profit slumped 95 per cent to $3.2 million during the third quarter, due largely to absence of contribution from subsidiaries disposed, lower contributions from logistics operations, higher expenses and manpower costs to support new developments in the data centre business.
Earnings per share sank 81.6 per cent to 2.3 cents, while net asset value per share was $1.45 as at Sept 30, up slightly on the $1.43 as at Dec 31 last year.
Keppel T&T said the logistics division has stepped up its efforts in rightsizing and optimising its resources, while developing new revenue streams.
Through Courex, an e-commerce logistics firm in which Keppel T&T holds a majority stake, the division will aim to capture the business-to-business and business-to-consumer markets in Singapore - "to counter the headwinds posed by rising market competition and disruptive trends in ecommerce retail and distribution".
Keppel T&T added that the group has decided not to proceed further with the strategic review on its shareholding in M1 during the quarter, together with other substantial shareholders of the telco.
"The group will continue to seek opportunities and make strategic investments in accretive assets and explore opportunities to unlock value and recycle capital," it said.
Keppel T&T shares closed 0.7 per cent or one cent lower at $1.48 yesterday, before the results were released.