SINGAPORE (April 18): Keppel Telecommunications & Transportation (Keppel T&T) posts earnings of $11.6 million in the first quarter ended March 31, falling 13.1% from earnings of $13.3 million reported a year ago.
Revenue fell 15.6% to $40.7 million, from $48.3 million a year ago, due mainly to lower revenue from both its logistics and data centre divisions.
Revenue from Keppel T&T’s data centre business decreased largely due to the disposal of its 90% interest in Keppel DC Singapore 3 in January 2017 and the disposal of its 50% interest in Keppel DC REIT Management in July 2016. After the disposal, both companies were classified as associated companies of the group.
Operating loss was $1.7 million in 1Q17, compared to operating profit of $6.7 million in the corresponding quarter last year.
This was due largely to absence of contribution from subsidiaries disposed, higher start-up expenses, and manpower employed to support new developments in the data centre business.
Cash and cash equivalents stood at $172.4 million as at March 31, 2017.
Looking ahead, Keppel T&T says the market outlook for its logistics business “remains challenging” amid “slowing economic and trade growth as well as margin pressures from intense market competition”.
Meanwhile, its data centre division is set to add over 195,000 sq ft in gross floor area with the completion of Keppel DC Singapore 4 and PCCW Global - Keppel ICX (Hong Kong) in the second quarter of 2017.
It adds that it will “continue to seek new asset development and acquisition opportunities in collaboration with the Alpha Data Centre Fund, and provide value-added services to further strengthen its market position.”
On the investment front, Keppel T&T says it is currently undertaking a strategic review of its shareholdings in M1, together with the other significant shareholders, and will make further announcements as appropriate.
Shares of Keppel T&T closed half a cent lower at $1.76 on Tuesday.
