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How Did Keppel Corporation Limited’s Property Business Fare In The First Quarter Of 2018?

Keppel Corporation Limited (SGX: BN4) is a conglomerate with four major business segments, namely, Offshore & Marine, Property, Infrastructure, and Investment.

In mid-April, Keppel Corp reported its 2018 first quarter earnings. Given that the company has a few businesses, I thought it would be useful to take a separate look at each of the segments.

In a previous article, I discussed the Offshore & Marine segment. My focus in this article is on the Property segment. [Editor’s note: An article discussing the Infrastructure segment has been published. It can be found here.]

The financial performance

Here’s a table showing some key financial numbers for the Property business for the first quarter of 2018:


Source: Keppel Corp 2018 first quarter earnings presentation

As a quick introduction, Keppel Corp’s Property segment deals with property trading, property investment, and the management of hotels, resorts, and REITs.

We can see from the table above that the segment delivered a solid performance in the first quarter of 2018.

Revenue more than doubled mainly due to strong performances in China and Singapore. Similarly, profit before tax soared by 303% mainly due to “the gain on divestment of the stake in Keppel China Marina Holdings Pte Ltd as well as higher contribution from Singapore and China property trading, partly offset by lower share of associated companies’ profits.”

What’s also useful to know is that the Property segment was the biggest contributor to Keppel Corp’s net profit in 2018’s first quarter, accounting for 112% (more than 100% due to losses in two segments) of the net profit figure.

The future

In Keppel Corp’s latest earnings update, the conglomerate shared a few words on the Property segment’s future:

“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. The Division will remain focused on strengthening its presence in its core and growth markets, while seeking opportunities to unlock value and recycle capital.”

Some closing words

In sum, Keppel Corp’s Property segment delivered a solid performance to start 2018.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.