Keppel Corp. makes up for flat 1Q11 revenue with 7.8% rise in net profit

The company's year on year net profit jumped to S$346.2mln for the quarter due to improved infrastructure earnings and stronger contribution from Keppel Energy.

Revenue, meanwhile, is at S$2.42bln.

Keppel Corp's offshore marine (O&M) unit reported strong operating margins of 21% while the energy division posted S$31 mln in earnings.

Revenue from the O&M unit, however, dropped 20% YoY as billings for most of the new projects have
not started.

Earnings from the property sector also remained flat YoY as the environment continues to reel from the effects of the imposed cooling measures.

In a statement, DMG Research said the influx of orders to Keppel Corp's shipyard meant the company can now "cherry pick" new projects.

"Management can afford to be selective on new O&M projects as its yards are filling up fast," the research firm said.

Keppel's net order book stands at S$7.5bln, with S$5bln coming from new jobs this year. Deliveries are scheduled up to 2014.

With 13 jackup options worth more than S$3.5bln, DMG Research remains bullish the company can achieve its order win forecast of S$6.5bln in FY11.

In a speech to the company's investors, Keppel Corp. Chief Executive Officer Choo Chiau Beng said Keppel Land and K-REIT are setting their sights on other Asian markets to offset the blow at home caused by property cooling measures.

"We remain positive on the long term prospects of countries such as China, Vietnam and Indonesia that have continued to show growth, and will focus on developing quality homes in these markets.

With Asia's growth expected to remain reasonably healthy, the office market is likely to stay firm, auguring well for Keppel Land and K-REIT Asia's strategy to grow their portfolios," Choo said.

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