The segment contributed $938m to the company's yearly earnings.
Keppel Corporation saw its profits explode 382% to $944m in 2018 from $196m in 2017, an announcement revealed. Revenue however was comparable to 2017, inching up a mere $1m.
The firm’s earnings per share increased correspondingly to the boost in profits, rising 381% to $0.052 from $0.011 in 2017.
For Q4, Keppel registered profits of $135m compared to the net loss of $492m for the same period in 2017. Excluding the one-off global resolution and related costs of $619m, the firm’s profits for Q4 would have grown 6% YoY, Keppel explained in a statement. Revenue for the quarter jumped 9% YoY to $1.67b from $1.56b.
Keppel’s offshore and marine (O&M) division registered a net loss of $109m in 2018, although this was an improvement of 87% compared to the net loss of $826m reported in 2017 that included the one-off financial penalty and related costs arising from Keppel O&M’s global resolution, the statement revealed.
The stronger performance for its O&M division was attributed to a combination of higher revenue, a write-back of provisions for claims and lower net interest expenses, although these were partially offset by provisions made for expected losses on the firm’s contracts with Sete Brasil and other asset impairments.
That being said, the division secured contracts worth about $1.7b in 2018, including a mid-water harsh environment semisubmersible and over $600m worth of LNG and scrubber projects, Keppel highlighted.
Meanwhile, Keppel’s property division recorded a 44% increase in profits to $938m, contributing the largest to the firm’s earnings in 2018. Amidst lower value gains from its investment properties and contributions from property trading, the increase was attributed to the en-bloc sales of development projects and gains from the divestment of a stake in a Beijing commercial project, Keppel highlighted.
“In 2018, the property division replenished its landbank with about 3,600 units in China and about 500 units in Indonesia, bringing the total to 50,000 homes across key Asian cities,” Keppel added. “Of these, about 19,000 homes will be launch-ready from 2019 to 2021.”
Likewise, Keppel’s infrastructure division saw a 26% YoY growth in profits to $169m in 2018 on the back of dilution gain following Keppel DC REIT’s private placement exercise, and the gain arising from a sale of stake in Keppel DC REIT. On the other hand, these were partially offset by lower contributions from energy infrastructure and share of profits from Keppel Infrastructure Trust, as well as the absence of gains from the divestment of GE Keppel Energy Services.
“Against a volatile backdrop, 2018 was a transformational year for Keppel, as we continued to reinvent and position ourselves for long-term growth,” the Keppel Corporation’s CEO Loh Chin Hua said in a statement. “We will remain focused on building a nimble and agile Keppel, ready to seize opportunities in our existing businesses even as we grow new engines for the future.
The firm outlined various initiatives in its financial statement which will include scaling up its property presence in key markets such as Indonesia, India and Vietnam, as well as continuing to develop its data centre business locally and overseas.
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