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4 Quick Things Investors Should Learn About Keppel Corporation Limited

Keppel Corporation Limited (SGX: BN4) is one of the cool companies which shares webcasts of its quarterly earnings presentations (the link to Keppel Corporation’s webcast is here).

The business of Keppel Corp can be organised into four different business units: Offshore and Marine; Infrastructure; Property; and Investments.

The business units houses various subsidiaries such as real estate developer Keppel Land Ltd (SGX: K17) and infrastructure outfits Keppel Telecom & Transport Ltd (SGX: K11) and Keppel Infrastructure Trust (SGX: LH4U).

Keppel Corp also has stakes in other companies – either directly or through its subsidiaries – like investment firm K1 Ventures (SGX: K01), telecommunications outfit M1 Ltd (SGX: B2F), and oil and gas explorer KrisEnergy Holdings Ltd (SGX: SK3).

You can read more about Keppel Corp in here and here.

Below are four useful (additional) things I learned from listening to Keppel Corp’s fourth quarter webcast:

  1. On the Offshore and Marine segment, Chief Executive Officer Loh Chin Hua believes that the quality of his company’s orderbook is one of the best in the industry. At the end of 2014, Keppel Corp had an orderbook of $12.5 billion. Of this amount, less than 20% of the jackups orderbook are without charter contracts while the rest of the orders (except the CAN DO drill-ship) are contracted. There are no cancellations or withdrawals of contracts at the present moment (note: the webcast was on 23 January 2015), but there had been two customer requests to delay delivery.
  2. Regarding new orders for the Offshore and Marine segment, Loh stressed that it is critical for Keppel Corp to be very disciplined in taking on orders in this challenging market condition. He felt that the hallmarks of the Offshore and Marine segment’s excellence – safety, on-time deliveries, on-budget execution – needs to be preserved.
  3. There was also a little history lesson shared as well. Chow Yew Yuen, Chief Executive Officer for the Offshore and Marine segment, recounted that the segment did not receive a new order for the first nine months of 2008 (when oil prices dipped to the US$40 range). Orders only recovered in the fourth quarter of that year. When oil prices will recover today is still anyone’s guess, Chow said.
  4. On the subject of potential acquisitions in the wake of many of Keppel Corp’s competitors now sporting lower valuations, Loh said that it is important for the company to find a good fit for itself. But that said, Chow also answered with the phrase: “do not waste a good crisis.”

Foolish takeaway

To buy and hold a company’s shares for the long term also means keeping up with developments in the company.

The access to management teams via webcasts gives the Foolish investor a fair chance to judge for themselves whether they’d like to be invested alongside those management teams. It also helps us put together a more complete thesis around a company and keep up with developments in its industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.