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(SINGAPORE) Keppel Corp turned in its best-ever quarterly results in the second quarter, with a net profit of $317.3 million before exceptionals - a 6 per cent rise from $299.3 million in Q208.
With the benefit of gains from the $1.47 billion sale of SPC to PetroChina, net profit more than doubled to $739.5 million. For the first half, net profit also rose to a record $602.6 million, and with the exceptional gain, went past the billion-dollar mark to $1.02 billion.
Q2 revenue rose 21 per cent to $3.2 billion on bigger contributions from the staple offshore and marine (O&M) and property divisions. First-half revenue rose 27 per cent to $6.18 billion, also driven by the O&M and property divisions, as well as the infrastructure division.
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For the half-year, O&M revenue of $4.38 billion, which made up more than two-thirds of total revenue, was 36 per cent higher than in the previous year, as Keppel completed and delivered 15 major projects. Property revenue of $547 million was up 7 per cent, due to a higher percentage of physical completion of units sold at Reflections at Keppel Bay. Revenue from Keppel Land was lower, however, as several residential projects in Singapore and overseas were completed in the previous financial year.
Revenue from infrastructure rose 11 per cent to $1.22 billion on engineering, procurement and construction (EPC) revenue recognition from the Doha North project in Qatar, although this was partially offset by lower revenue from the Keppel Merlimau cogen power plant in Singapore because of lower energy prices.
Pre-tax profit from O&M and infrastructure in particular showed sharp gains, but these were partly offset by lower contributions from property and investments. O&M's pre-tax profit of $523 million was 37 per cent higher than in the previous year, on higher revenue and improved operating margins as the learning curve flattened out with the many similar rig-building projects in its order book. The division remains the biggest profit contributor, making up 60 per cent of overall pre-tax profit.
The infrastructure division, meanwhile, more than doubled its profit contribution to $79 million, although it remains a relatively small component of the total profit mix (9 per cent).
Profit from property fell slightly to $178 million on lower profit from Keppel Land, and a drop in profit from investments was due to reduced contribution from SPC.
Looking ahead, Keppel chief executive Choo Chiau Beng said the group is concerned about the O&M division's order book - it did not win any orders in Q2. Still, he is 'cautiously confident that we will get some'. And he does not see any more order cancellations.
On growth opportunities, Mr Choo highlighted the group's developments in China and said he is 'optimistic the Tianjin eco city project will be value-enhancing for Keppel'.
Interim dividend rose to 15 cents per share, from 14 cents previously. Keppel shares closed 33 cents higher at $7.83 yesterday.
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