Keppel Land posts 32% fall in quarterly profit

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http://www.straitstimes.com/archive/thursday/premium/money/story/keppel-land-posts-32-fall-quarterly-profit-20130418

Keppel Land posts 32% fall in quarterly profit

Published on Apr 18, 2013

By Cheryl Ong


KEPPEL Land yesterday announced a slide of 31.9 per cent in net profit to $96.6 million for the three months to March 31.

The group said one key reason for the decline was a bumper profit recognised from units sold at Reflections at Keppel Bay under the deferred payment scheme in the same period a year earlier.

Despite the drop in the bottom line, revenue for the three months rose 21.6 per cent to $207 million, mainly thanks to improved contributions from its property trading, hotels and resorts, and fund management segments.

"Revenue from Singapore operations increased by $105.7 million, mainly from Lakefront Residences and The Luxurie as a result of higher percentage of physical completion achieved in the current quarter," Keppel Land said.

No dividends will be recommended for the three months ended March 31.

Earnings per share for the quarter came in at 6.2 cents, down from 9.5 cents in the corresponding quarter a year earlier. Net asset value per share as of March 31 was $4.11, up from $3.99 cents on Dec 31 last year.

Keppel Land also said it will maintain its focus on the group's two core markets of Singapore and China.

"The group will look out for opportunities to acquire more residential, commercial, township and mixed-use developments in these markets," it noted. Keppel had acquired a stake in retail mall Life Hub @ Jinqiao in Pudong, Shanghai, in February this year.

It also sold 850 units in China home sales during the quarter, up from 190 units sold in the same period a year ago. Sales were mainly from its developments in Chengdu and Shanghai.

Keppel Land's Corals at Keppel Bay is ready for launch and sales are expected to start soon. The development comprises 366 waterfront homes, mostly one- and three-bedroom units with sizes ranging from 600 to 1,500 sq ft.

KepLand's share price rose two cents to close at $3.99 yesterday.

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http://www.businesstimes.com.sg/premium/companies/others/keppel-corp-q1-earnings-fall-525-357m-20130419

Published April 19, 2013

Keppel Corp Q1 earnings fall 52.5% to $357m

Previous Q1 had included profit lift from Reflections at Keppel Bay

By Lynn Kan


IN the absence of an earnings boost seen last year from Reflections at Keppel Bay, Keppel Corporation reported a 52.5 per cent fall in first-quarter net profit to $357 million, from $751 million in the previous corresponding quarter.

Earnings per share for the three months ended March 31 were 19.8 cents, down from 41.9 cents a year ago.

"Profit for the first quarter last year hit a record high due to profit recognition arising from the delivery of Reflections at Keppel Bay apartments sold under the Deferred Payment Scheme," said Keppel.

The drop in profit attributable to shareholders came on the back of a 35.3 per cent fall in revenue to $2.76 billion from $4.27 billion.

The group said that excluding revaluation, impairments and divestments, its net profit was $331 million, down 56 per cent.

Keppel Corporation CFO Loh Chin Hua said: "If one takes out the net profit contributions from sales of units at Reflections and sales of quoted investments that were part of our capital recycling initiative from last year's first quarter results, the net profit for the 1Q 2013 is largely in line."

Reflecting the Reflections at Keppel Bay factor, the property division saw a sharp 80 per cent contraction in net profit contribution to $80 million, on the back of an 80 per cent decline in revenue contribution from $1.52 billion to $298 million.

Net profit contribution from Keppel Offshore and Marine, the group's core rigbuilding, ship repair and conversions arm, was down 12 per cent year-on- year at $208 million. Revenue from the division fell 15 per cent y-o-y to $1.7 billion, due to lower volume of work undertaken in the first three months of this year.

Notably, operating profit margin at 14 per cent at the O&M segment for the quarter exceeded the group's guidance of 10-12 per cent. In Q1 2012, operating margin for O&M was 15 per cent.

Q1's operating margin for O&M signalled a slight margin recovery from Q4 2012's 12.9 per cent levels. Margins on projects have begun to slide because of increased competition from Chinese and Korean rivals.

Commenting on the better margin performance, Credit Suisse said in a report: "We believe the improvement in margin is driven by an acceleration of rig deliveries, with five jack-ups delivered in Q1 2013 compared with one in Q4 2012."

Keppel executives kept their margin guidance for FY2013 as they were at 10-12 per cent.

Choo Chiau Beng, group CEO of Keppel Corporation, said: "We delivered many B Class jack-ups (this quarter) and as learning curve improves, margin will improve."

Keppel Corp's infrastructure division saw first-quarter net profit double to $55 million, helped by a reversal of provision at Keppel Energy. Revenue increased 11 per cent to $757 million, because higher revenue from the higher contracted load at Keppel's co-generation plant offset the decline in revenue from Keppel Integrated Engineering.

Keppel said the Keppel Merlimau Cogen power plant will be completed by mid-2013, which will allow it to continue growing its market share in Singapore.

On the offshore and marine side, Keppel secured US$1.66 billion worth of contracts to-date, mostly in jack-up orders.

Meanwhile, orders for drillships may not materialise because of the large number being built in Korean yards, said Tong Chong Heong, the chief executive officer of Keppel Offshore & Marine. He said enquiries for semi-submersible rigs have been forthcoming and expressed confidence that at least one order would materialise in the second half of the year.

Keppel Corporation shares fell four cents to $11.25 yesterday.