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10 Things Investors Should Know About Keppel Corporation Limited’s Latest Earnings

Last Friday, Keppel Corporation Limited (SGX: BN4) released its fourth-quarter earnings update for the year ended 31 December 2018. Keppel Corporation is a conglomerate with major business segments that include offshore and marine, property, infrastructure, and investment.

Here are 10 things investors should know about Keppel Corporation’ latest results:

  1. Revenue for the quarter was up 8.5% year over year to S$1.7 billion.
  2. Yet, profit from operations fell by 96.5% to S$5.1 million, driven mainly by higher operating costs.
  3. Despite lower operating profit, net profit attributable to shareholders improved from a loss of S$492.0 million last year to a profit of S$145.3 million for the current quarter. The higher profitability in the reporting quarter was mainly due to the absence of one-off costs incurred in the previous year.
  4. The conglomerate’s operating margin deteriorated from 9.6% last year to 0.3% in this quarter.
  5. Operating cash flow for the quarter was a negative S$39.4 million, down from S$391.8 million in 2017, mainly due to negative changes in working capital.
  6. The conglomerate’s net debt grew from S$ 5.5 billion on 31 December 2017 to $5.6 billion on 31 December 2018. This resulted in the net gearing ratio worsening from 46% to 48% over the same period.
  7. Keppel’s Offshore and Marine and Infrastructure segments showed improvement in net profit compared to last year. On the other hand, the Property and Investment segments reported lower profit on a year-over-year basis.
  8. Return on equity (ROE) was at 8.3% for the full year of 2018.
  9. Keppel Corporation proposed a final dividend of S$0.15 per share. Together with the interim dividend paid, total dividend per share for 2018 would be S$0.30.
  10. In Keppel Corporation’ latest earnings update, Loh Chin Hua, the CEO of the conglomerate, commented:

“Against a volatile backdrop, 2018 was a transformational year for Keppel, as we continued to reinvent and position ourselves for long-term growth.

Notwithstanding the challenging macro environment, urbanisation trends continue to present many exciting long-term opportunities for Keppel, whether it is providing energy, property, environmental solutions or connectivity. We will remain focused on building a nimble and agile Keppel, ready to seize opportunities in our existing businesses even as we grow new engines for the future.”

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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 does not own shares in any companies mentioned.