Keppel Corp. reported on Thursday that its net profit for the second quarter rose 44 percent on-year to S$246 million, as stronger property and infrastructure earnings offset losses in other divisions.
Revenue for the second quarter fell 2 percent on-year to S$1.523 billion, it said in a filing to SGX after the market close on Thursday, with property division revenue falling by S$298 million to S$244 million in the quarter on lower revenue from Singapore and China property training.
Tax expenses in the quarter fell by S$17 million on-year, mainly on the reversal of a tax provision related to the divestment of Keppel China Marina Holdings, it said.
For the first half of 2018, net profit rose 38 percent on-year to S$583 million, while revenue increased 7 percent on-year to S$2.993 billion.
Revenue in the offshore & marine and property divisions remained stable for the first half, while infrastructure revenue for the first half increased 23 percent on-year to S$1.211 billion on better sales in the power and gas businesses and revenue recognition for the Keppel Marina East Desalination Plant project, the release said.
The property division saw its net profit climb 214 percent on-year in the first half to S$603 million, making it the largest contributor to the group, the filing said.
“The increase was due mainly to the en bloc sales of development projects, a fair value gain on an investment property which has been
designated for redevelopment for sale, as well as higher contributions from Singapore and China property trading, partly offset by a lower share of associated companies’ profits,” it said.
For the first half, the offshore & marine division posted a net loss of S$40 million, swinging from a year-earlier net profit of S$11 million, on lower operating results, lower shares of associated companies’ profits, higher taxes for overseas operations and the absence of a one-off divestment gain from Keppel Verolme in the year-earlier period, the release said.
The infrastructure division’s net profit for the first half rose 16 percent on-year to S$66 million, mainly on a dilution gain following Keppel DC REIT’s private placement exercise and higher contributions from Environmental Infrastructure and Infrastructure Services, it said. But it added that it was partly offset by lower contributions from Energy Infrastructure and Keppel Infrastructure Trust, as well as the absence of gain from divestment of GE Keppel Energy Services in the year-earlier half year.
Looking ahead, Keppel said that Infrastructure Services’ recurring income was expected to grow as long-term contracts take effect for the Keppel Marina East Desalination Plant in 2020 and the Hong Kong Integrated Waste Management Facility in 2024.
The investment division swung to a net loss of S$46 million in the first half, from a S$163 million net profit in the year-earlier period, it said, noting that the year-earlier period benefited from land sales in the Sino-Singapore Tianjin Eco-City, the write-back of a provision and profit from the sale of investments.
For the first half, Keppel declared an interim cash dividend of 10.0 Singapore cents a share and a special dividend of 5.0 Singapore cents a share to mark the company’s 50th anniversary, it said. That compared with a a 8.0 Singapore cent interim dividend for the year-earlier half-year, it said.