5 Quick Things Investors Should Learn About Keppel Corporation Limited’s Latest Quarter

Keppel Corporation Limited (SGX: BN4) released its 2017 first quarter earnings in late April. The earnings release contained a transcript of an address given by the company’s chief executive officer, Loh Chin Hua.

In that transcript, I had picked out some useful learning points about the firm’s offshore and marine (O&M) division which you can check out here. In addition, I had noted five other useful things from the transcript about Keppel Corporation’s other business divisions and the company on the whole.

As a brief introduction, Keppel Corporation organizes its business into four divisions: O&M; Infrastructure; Property; and Investments. With that, let’s look at what we can learn from the transcript:

1. Loh credited Keppel Corporation’s resilience to its diversified revenue base. In particular, he said that the net profit from the Property division was able to offset the fall in profit from the O&M division.

2. Keppel Land sold 980 homes in the first quarter of 2017. China contributed 730 homes while Vietnam and Singapore pitched in with 110 homes and 130 homes, respectively. Loh said that Keppel Corporation has a first-mover advantage in Vietnam and that the company will be deepening its presence in the market. With regards to China, Loh said that home sales had slowed due to property cooling measures.

3. Loh also shared that Keppel Land has a large landbank worth over 64,000 homes in key Asian cities. Furthermore, the Property division has 18,000 ready-to-launch homes in its portfolio.

4. On the Infrastructure side, Loh is expecting the division to be a stable contributor to Keppel Corporation. The Infrastructure business signed a 25-year water purchase agreement with Singapore’s PUB earlier this year for a desalination plant. The plant is expected to start operations in 2020. Keppel Corporation also expects growth to come from data centres. Loh added that Keppel Corporation is looking to strengthen its position in energy and environmental infrastructure.

5. Keppel Corporation recorded a net gearing of 0.57 for the first quarter, relatively unchanged from the prior quarter. Loh added that 30% of the group’s income in the first quarter of 2017 were deemed to be recurring in nature.

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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 writer Chin Hui Leong doesn't own shares in any company mentioned.