Keppel Corp posts 6% rise in 4Q earnings to $726 million

SINGAPORE (Jan 22): Keppel Corp posted a 6% rise in 4Q earnings to $726 million, or 39.9 cents per share. This was 6% above the $684 million recorded in 4Q13, led by higher pre-tax profit from most of its divisions.

For the full year FY14, earnings fell 19% to $1.39 billion from $1.72 million. Earnings per share rose by 2% to 103.8 cents.

Group revenue for 4Q14 ended Dec of $3.93 billion, 9% higher than that of 4Q13.

Revenue from the Offshore & Marine Division revenue increased by 15% to $2.38 million as a result of higher revenue recognition from ongoing projects.

Revenue from the Infrastructure Division came in at $675 million, $300 million lower than the same quarter last year. This was due mainly to a drop in revenue from Keppel Infrastructure’s power generation plant, but partly offset by better performance from Keppel Telecommunications & Transportation’s data centre and logistics businesses.

Revenue from the Property Division came in at $833 million, $295 million higher than in 4Q13. This was led from higher revenue contributed from China as well as sale of a residential development in Jeddah, Saudi Arabia.

Increase in revenue of the Investments Division from $14 million in 4Q13 to $41 million in 4Q14 was mainly as a result of sale of investments.

Group pre-tax profit showed an improvement of 5% from $1.11 billion in 4Q13 to $1.16 billion in 4Q14.

The Offshore & Marine Division’s pre-tax profit of $357 million was $9 million above that of 4Q13 mainly from higher contributions from associated companies.

The Infrastructure Division achieved pre-tax profit of $303 million for 4Q14 compared to pre-tax loss of $96 million for 4Q13 from better operating results from both Keppel Infrastructure and Keppel T&T and gains from divestments of data centre assets and Keppel FMO.

The Property Division’s pre-tax profit dropped by $308 million to $528 million mainly due to lower fair value gains on investment properties and absence of gains from deconsolidation of Keppel REIT recognised in 4Q2013 partially offset by gain from the disposal of one-third interest in MBFC T3 in 4Q2014.

In its outlook statement, Keppel said the fall in oil prices, the expected reduction in global oil and gas upstream spending and the projected oversupply of oil rigs have created a challenging environment.

Still, the Offshore & Marine Division managed to secure $5.5 billion of orders for the year, bringing its net order book at the end of 2014 to $12.5 billion with deliveries extending into 2019.

Meanwhile, the Property Division will continue to maintain its presence in its core and growth markets while seeking to invest opportunistically. It also plans to strengthen its commercial portfolio overseas.

Keppel has recommended a final cash dividend of 36 cents per share for the FY14.

Together with the interim dividend of a cash dividend of 12 cents per share, total distributions paid for the financial year ended Dec 31 will be 48 cents in cash per share.

Keppel is still halted from trading. The stock last closed at $8.10, giving it a market cap of $14.7 billion.