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How Did Keppel Corporation Limited’s Infrastructure 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 previous articles, I had discussed the Offshore & Marine and Property segments. My focus in this article is on the Property segment.

The financial performance

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


Source: Keppel Corp 2018 first quarter earnings presentation

As a quick introduction, Keppel Corp’s infrastructure division deals with the provision of energy, environmental, infrastructure, logistics, and data centre services.

We can see that the segment had delivered a mixed performance in the first quarter of 2018. Revenue increased by 21% year-on-year due to increased sales in the power and gas businesses, as well as revenue recognition from the Keppel Marina East Desalination Plant. Yet, the bottom line declined mainly due to the absence of divestment gains in the reporting quarter. Excluding the one-off numbers, the pre-tax profit of the Infrastructure segment would have increased by S$5 million instead.

The future

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

 “In the Infrastructure Division, Keppel Infrastructure will continue to build on its core competencies in energy and environment-related infrastructure as well as infrastructure services businesses to pursue promising growth areas.

 Keppel Telecommunications & Transportation will continue to develop its data centre business locally and overseas. Besides building complementary capabilities in the growing e-commerce business, it plans to transform the logistics business from an asset-heavy business to a high performing asset-light service provider in urban logistics.”

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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.