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How Does Keppel Corporation Limited Make Money?

It is essential for investors to know what a particular company does and how it makes money before investing in it. Investing in businesses without such knowledge is akin to speculation.

On that note, let’s check out what business Keppel Corporation Limited (SGX: BN4) is involved in and how it generates revenue. As a quick introduction, Keppel is a conglomerate with four main business divisions, namely, Offshore & Marine, Property, Infrastructure, and Investments.

Let’s look at Keppel’s segment revenue for the financial year ended 31 December 2017 below:Source: Keppel Corporation Limited 2017 annual report

The Offshore & Marine division brought in around 30% of total revenue in 2017. The main activities of this segment are offshore rig design, construction and repair, ship repair and conversion, and specialised shipbuilding. The Offshore & Marine segment has operations in countries such as Brazil, China, Singapore, and the United States.

Next, there is the Property division, which is involved in property development and investment, and property fund management. This segment operates in Australia, China, India, Indonesia, Singapore, and Vietnam, among other countries.

Moving on, the Infrastructure division’s main activities include environmental engineering, power generation, logistics and data centres. It has operations in countries like China, Qatar, Singapore, and the United Kingdom. Its listed entity, Keppel Telecommunications & Transportation Ltd (SGX: K11), is under this division.

Last but not the least, the Investments division comprises Keppel Capital, the asset management arm of the Keppel, and the newly-established Keppel Urban Solutions. It also includes Keppel’s investments such as KrisEnergy Ltd (SGX: SK3) and M1 Ltd (SGX: B2F).

Keppel Capital manages three Singapore-listed real estate investment trusts (REITs) and a business trust – Keppel REIT (SGX: K71U), Keppel-KBS US REIT (SGX: CMOU), Keppel DC REIT (SGX: AJBU) and Keppel Infrastructure Trust (SGX: A7RU). Keppel Capital is also a manager of private funds, Alpha Investment Partners. Meanwhile, Keppel Urban Solutions is an end-to-end master developer of urban developments.

For Keppel’s group structure showing the respective shareholdings of the companies held under Keppel, you can head to its website here.

In terms of geographical breakdown, markets outside of Singapore contributed to around 49% of 2017’s total revenue of S$5.96 billion.

Now that we know the basics of Keppel’s business divisions and how they bring in the money, we can then delve into other aspects of the firm such as its profitability, strength of its balance sheet, its cash-generating abilities and so on before deciding to invest in it.

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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 Sudhan P doesn’t own shares in any companies mentioned.