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Keppel 4Q profit rises 30% on property

HONG KONG: Keppel Corp, the world’s largest oil-rig maker, said fourth-quarter profit climbed 30% as higher sales at a property unit offset slumping demand for rigs.

Net income climbed to S$343 million (RM835.1 million) from S$263 million a year earlier, the company said on Jan 26 in a statement to the Singapore stock exchange. Sales dropped 19% to S$3.03 billion.

Keppel’s property arm boosted profit 88% in the quarter on demand for residential projects in Singapore and overseas. Earnings at the company’s offshore business, which accounted for 71% of total profit, dropped as the global recession sapped investment in oil exploration.

“The long-term prospects remain good, with global oil demand expected to continue rising,” the company said in the statement. “While it is unlikely that we will see a return to the high volume of newbuild rig orders of the last four to five years, there continues to be a healthy level of inquiries for our products and solutions.”

Keppel dropped 1.6% to S$8.09 on the Singapore exchange on Jan 26 before the earnings announcement. The stock rose 97% in the past year, outperforming a 63% advance for the 30-member Straits Times Index.

Fourth-quarter profit at Keppel’s offshore unit dropped 9% to S$201 million and sales fell 41% to S$1.77 billion.

The property unit had a profit of S$77 million in the fourth quarter while revenue more than doubled to S$599 million, according to the statement.

The company also proposed distributing 50.5% of K- Green Trust to existing shareholders as a dividend prior to listing the unit on the Singapore stock exchange, it said in a separate statement on Jan 26.

It will distribute 326 million units of K-Green Trust, valued at about S$379 million, or S$1.16 per unit. Shareholders will get one unit for every five Keppel shares held, meaning the distribution value is about 23 Singapore cents per share. Keppel aims to list the trust by the second quarter, it said.

Keppel said it will keep 49.5% of K-Green Units for at least 12 months after the date of admission to the exchange. – Bloomberg L P
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