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How Did Keppel Corporation Limited’s Infrastructure Business Fare In The 2018 Second-Quarter?

Keppel Corporation Limited (SGX: BN4) is a conglomerate with major business segments such as Offshore and Marine, Property, Infrastructure, and Investment. On 19 July, the conglomerate reported its second quarter results for the year ending 31 December 2018 (1Q FY2018). Let’s have a quick summary of its Infrastructure segment’s performance.

Financial performance

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

Source: Keppel Corporation Results Presentation

As a quick introduction, Keppel’s Infrastructure division comprises the conglomerate’s businesses in energy, environment and infrastructure services, as well as logistics and data centres.

Overall, we can see that the segment delivered a solid performance of higher revenue and profitability as compared to the same period last year.

Revenue from the Infrastructure segment grew by 23% to $1.21 billion as a result of increased sales in the power and gas businesses, as well as progressive revenue recognition from the Keppel Marina East Desalination Plant project.

This improvement in profit was mainly due to dilution gain from Keppel DC REIT’s private placement exercise as well as higher contribution from Environmental Infrastructure and Infrastructure Services. These were partially offset by lower contribution from Energy Infrastructure, lower share of profits from Keppel Infrastructure Trust (SGX: A7RU), and absence of gain from divestment.

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.