SINGAPORE (Jan 23): Keppel Corporation saw its earnings jump 41.5% to $191.4 million for 4QFY2019 ended December 2019, from $135.3 million a year ago.
However, this was not enough for the conglomerate to report a drop in its full year results.
FY2019 earnings fell 25.5% to $707.0 million, from $948.4 million a year ago, largely due to the absence of one-off gains from the en-bloc sales of development projects and property divestments in FY2018.
4QFY2019 revenue soared 31.1% to $2.20 billion, led by improvements in its Offshore & Marine (O&M) and Investments divisions.
Revenue from the O&M division increased by $255 million to $775 million, due mainly to higher revenue recognition from ongoing projects, while revenue from the Investments divisions surged more than eight-fold to $340 million on the back of the consolidation of M1 and higher revenue from the asset management business.
The higher revenue during the quarter was partially offset by a $50 million drop in revenue from its Property division to $323 million, due mainly to lower revenue from property trading projects in Vietnam and China.
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However, pre-tax profit from the Property division rose 12% to $242 million in 4QFY2019, due mainly to higher fair value gains on investment properties, higher contribution from property trading projects in Singapore and higher investment income.
As at end December 2019, cash and cash equivalents stood at $1.78 billion.
The board has recommended a final cash dividend of 12.0 cents per share for FY2019 – some 20% lower than the final cash dividend of 15.0 cents paid a year ago – to be paid on May 14, 2020.
Together with the interim dividend comprising a cash dividend of 8.0 cents per share, this brings total distributions for FY2019 to 20.0 cents per share.
In FY2018, Keppel Corp had paid an interim dividend of 10.0 cents per share and a special dividend of 5.0 cents per share.
“Key business segments of the Keppel Group performed creditably against a volatile backdrop in 2019,” says Loh Chin Hua, CEO of Keppel Corporation. “Our diversification and cost management strategies have returned Keppel O&M to profitability for the first time since FY 2016.”
Excluding the Sete Brasil rigs, Keppel notes that the net order book for its O&M division stands at $4.4 billion.
The group says the division will continue to focus on delivering its projects well, exploring new markets and opportunities, investing in R&D and building new capabilities.
“Notwithstanding lower gains from lumpy en-bloc sales and divestments, Keppel Land’s operations remain strong with 16% more homes sold in 2019 compared to 2018. Our infrastructure, asset management and connectivity businesses have also contributed substantially to the group’s performance,” Loh adds.
Looking ahead, Keppel says its strategic acquisition of M1 complements the group's mission as a solutions provider for sustainable urbanisation, which includes connectivity.
It adds that it will continue to execute its integrated business strategy to provide solutions for sustainable urbanisation, and deepen collaboration across divisions, while being agile and innovative, and investing in the future.
Shares in Keppel Corp closed 5 cents lower, or down 0.7%, at $6.74 on Thursday, before the results announcement.
