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

Last week, Keppel Corporation Limited (SGX: BN4) released its first quarter earnings update for the financial year ending 31 December 2019. As a quick introduction, 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’s latest results:

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  1. Revenue for the quarter grew 4.1% year-on-year to S$1.5 billion.
  2. Yet, profit from operations fell by 33.9% to S$321.6 million, driven mainly by lower other operating income.
  3. Similarly, net profit attributable to shareholders for the quarter reduced by 39.9% year-on-year to S$202.9 million.
  4. The conglomerate’s operating margin deteriorated from 33.1% last year to 21.0% in this quarter.
  5. Operating cash flow for the quarter was a negative S$674 million, down from a negative S$10 million in the same period last year. This was mainly due to negative changes in working capital.
  6. The conglomerate’s net debt grew from S$5.6 billion, as of 31 December 2018, to $8.8 billion, as of 31 March 2019. This resulted in its net gearing ratio worsening from 48%, as of 31 December 2018, to 72% at end-March 2019.
  7. Breaking down the net profit further, the offshore and marine segment and the investment segment showed improvements in net profit as compared to last year. On the other hand, the property segment and the infrastructure segment reported lower profit on a year-on-year basis.
  8. The annualized return on equity (ROE) was at 7.0% for the quarter.
  9. No dividend was declared for the recent quarter.
  10. In Keppel Corporation’ latest earnings update, Loh Chin Hua, CEO of the conglomerate, commented:

“The main pieces of our strategic transformation are in place. Our focus is now on execution. When we have successfully executed on our strategy, Keppel will be a powerhouse of urbanisation solutions, with not only higher profits, but also higher quality, recurrent earnings. We will work all our engines hard towards achieving a mid-to-long term ROE target of 15% for the Group.”

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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.