4 Quick Things Investors Should Learn About Keppel Corporation Limited

Keppel Corporation Limited (SGX: BN4) is one of the cool companies in Singapore that shares webcasts of their quarterly earnings presentations (the link for Keppel Corp is here).

The business of Keppel Corp can be organised into four different business units:  Offshore and Marine; Infrastructure; Property; and Investments. You can read more about Keppel Corp in here and here.

What the oil is going on?

Below are four useful things I learned from reading the transcript of Keppel Corp’s fiscal first-quarter webcast:

  1. Speaking on the state of the global economy, Chief Executive Officer Loh Chin Hua said that if low oil prices persist into the future, the Offshore and Marine segment for Keppel Corp will undoubtedly be negatively impacted. Having said that, he expressed confidence that the company will be able to tide over tough periods like these by managing its costs and preparing itself to seize opportunities that arise. At the moment, capital expenditures for global oil exploration and production from Keppel Corp’s customers is anticipated to drop by 10% to 15% this year.
  2. On the Offshore and Marine segment, there were eight requests (five from Transocean and three from Fecon) for deferment of rigs by six months. Loh added that Keppel Corp is typically compensated for deferments. Meanwhile, Chow Yew Yuen, the Chief Executive Officer for the Offshore and Marine segment, feels that the projects from Sete Brasil, a Brazilian oil & gas outfit, is unlikely to be cancelled based on the progress that Keppel Corp has already made. Chow added that 16 rigs will be delivered this year. On the utilization of the yards, Loh commented that the yards will remain very busy for this year and the next.
  3. Elsewhere, Ang Wee Gee, the Chief Executive Officer of Keppel Land, mentioned that the company has decided to defer the redevelopment of GE Towers and Keppel Towers that were supposed to have taken place this year. Loh added that the properties are freehold and there was no rush for redevelopment.
  4. Responding to a question on the lower operating margin for the Offshore and Marine segment in the first-quarter of 2015, Chan Hon Chew, the Chief Financial Officer for Keppel Corp, commented that the 12% operating margin seen in the reporting quarter was still within the upper-end of the 10% to 12% range that the company has indicated in the past.

Foolish takeaway

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

The access to management teams via webcasts gives the Foolish investor a fair chance to judge whether they would like to be invested alongside those 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 company mentioned.