Last Thursday, Keppel Corporation Limited (SGX: BN4) released its 2018 second quarter earnings update. As a quick introduction, Keppel Corp is a conglomerate with major business segments that include Offshore & Marine, Property, Infrastructure, and Investments.
Here are nine things investors should know about Keppel Corp’s latest results:
1. Revenue for the quarter declined by 2.0% year-on-year to S$1.52 billion.
2. But, operating profit jumped by 73.6% to S$257.4 million, driven mainly by stronger performances in the Property and Infrastructure segments. The conglomerate’s operating margin improved from 9.5% 2017’s second quarter to 16.6% in the reporting quarter.
3. In all, net profit attributable to shareholders for the quarter increased by 44.4% to S$246.2 million.
4. Operating cash flow for 2018’s second quarter was S$367.1 million, more than double the S$171.7 million seen a year ago, mainly due to the Keppel Corp’s higher profit as mentioned earlier and positive changes in working capital.
5. Keppel Corp’s net debt from S$5.52 billion as of 31 December 2017 to S$4.87 billion at end-June 2018. This resulted in the company’s net gearing ratio improving from 46% to 40%.
6. From a segmental point of view, Keppel Corp’s property business reported a strong 132% increase in net profit to S$225 million. The Infrastructure segment was another good performer – it saw its net profit grow 60% from a year ago to S$ 40 million. The other two segments, namely Offshore & Marine and Investments, reported net losses of S$17million and S$2 million, respectively. A year ago, the duo had generated net profits of S$11 million and S$38 million.
7. For the first half of 2018, Keppel Corp’s annualized return on equity (ROE) was at 9.9%, significantly better than the 6.6% seen a year ago.
8. Keppel Corp declared an interim ordinary dividend of S$0.10 per share, up from S$0.08 a year ago. In addition, the conglomerate also declared a special dividend of S$0.05 per share for its 50th anniversary.
9. In Keppel Corp’s latest earnings update, Loh Chin Hua, the conglomerate’s CEO, commented:
“Keppel continued to deliver strong results in the first half of 2018. Our multi-business strategy and geographical diversification have enabled the Company to remain resilient, despite cyclical headwinds in some of our businesses.”
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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.