SHIPPING & MARINE | Staff Reporter, Singapore

Keppel's Q1 profits jumped 33.7% to $337.47m

Growth was led by the property division, whose profits surged by 298% to $378m.

Keppel Corporation is on a tear as its Q1 profits grew 33.7% YoY from $252m to $337.47m whilst its revenue grew 17.8% YoY from $1.25b to $1.47b.

Its offshore and marine division lost $151m due to lower volume of work and deferment of some projects, and its operating profit reached $8m. Year to date, the division obtained contracts worth $580m in total, including a mid-water harsh environment semi for Awilco Drilling with options for three more units and a newbuild LNG project which is a dual-fuel tanker. It also delivered the first of five jackups to Borr Drilling. Its net order book, excluding the Sete rigs, stands at $4.3b.

The profit of its property division surged 298% to $378m whilst its revenue grew by $281m to $543m, due to higher revenue from China and Singapore. The division completed the divestment of Keppel Cove in Zhongshan for a net gain of $289m, bought the remaining 10% stake in Saigon Sports City, and obtained full ownership of Keppel Land Retail Management.

"The Property Division sold about 300 homes in the first quarter of 2018, comprising about 190 in China, 50 in Vietnam and 60 in Singapore. Keppel REIT’s office buildings in Singapore and Australia maintained a high portfolio committed occupancy rate of 99.4% as at end-March 2018," Keppel added.

Meanwhile, Keppel's infrastructure division saw its profits fall 19% to $26m but revenue grow to $564m, due to increased sales in the power and gas businesses as well as progressive revenue recognition from the Keppel Marina East Desalination Plant project.

Keppel Electric is participating in the soft launch of Open Electricity Market, Keppel Seghers was awarded performance bonuses and a service agreement with Runcorn EfW Facility, whilst Keppel Data Centres partnered DE-CIX to enhance network connectivity.

Its investments division recorded a net loss of $44m due to fair value loss on KrisEnergy warrants and absence of Sino-Singapore Tianjin Eco-City (SSTEC) land sales. Alpha Asia Macro Trends Fund II also sold two assets in China and Korea.

"The newly established Keppel Urban Solutions will harness opportunities as an integrated master developer of smart, sustainable precincts, starting with Saigon Sports City in Ho Chi Minh City, while the Sino-Singapore Tianjin Eco-City Investment and Development Company Ltd will continue the development of the Eco-City, including selling further land parcels," Keppel said.

Keppel's directors recommended a final cash dividend of 14 cents per share planned to be paid on 10 May 2018.

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