Keppel posts 2H21 net profit jumps more than 20 times

Keppel Corp. reported Thursday its second half net profit surged by more than 20 times to S$723 million from S$31 million in the year-ago period as all business segments posted higher revenue.

Revenue for the July-to-December period increased 46 percent on-year to S$4.95 billion, the company said in a filing to SGX. 

Energy and Environment

The energy and environment segment posted revenue grew 81 percent on-year in the second half to S$3.47 billion, on higher electricity and gas sales and higher progressive revenue recognition from integrated waste management facility projects in Singapore and Hong Kong. The segment reported a pre-tax loss of S$292 million for the second half, narrowing from a S$309 million loss in the year-ago period. 

The offshore and marine segment reported revenue in the second half grew on higher revenue recognition from ongoing projects and new projects.

“While the O&M sector remains challenging and continues to be affected by labour and supply chain disruptions, Keppel O&M performed resiliently, seizing opportunities in the energy transition and staying laser-focused on execution, with nine major projects delivered during the year,” Loh Chin Hua, CEO of Keppel Corp. said in an address filed to SGX.

“With rising oil prices, the offshore drilling rig market has shown signs of improvement. Utilisation and day rates for modern jackups, which make up the bulk of Keppel O&M’s legacy rigs, both improved during the year and are projected to rise even further over the next few years,” Loh said, citing data from Pareto Securities. 

Urban Development

Urban development posted revenue fell by S$44 million to S$720 million in the second half on lower revenue from property trading projects in China, partly offset by higher revenue from property trading projects in Singapore. 

The segment report second half pre-tax profit of S$621 million, rising by S$248 million, mainly on higher fair value gains from investment properties and gains from the disposal of interests in Serenity Villas project in Chengdu and China Chic project in Nanjing, as well as disposal of a partial interest in Tianjin Fushi Real Estate Development

Connectivity

The connectivity segment posted second half revenue grew by S$41 million on-year to S$674 million, while its pre-tax profit rose by S$32 million on-year, mainly on the divestment of its interest in Wuhu Sanshan Port Co., higher contribution from M1, and lower net interest expense.

“Demand for connectivity solutions grew considerably during the pandemic, driving demand for Keppel’s Connectivity business,” Loh said in the statement, pointing to M1’s post-paid customer base growth of 6 percent for the full year.

Asset management

The asset management business posted second half revenue increased by S$9 million to S$84 million, mainly on higher management and acquisition fees. The segment’s pretax profit for the second half rose by S$158 million to S$192 million, on fair value gains on investment properties and data centers from Keppel REIT, Keppel DC REIT, Alpha Data Centre Fund and Keppel Data Centre Fund II, and a dilution gain from Keppel DC REIT’s private placement, the filing said.

For the full year, Keppel reported net profit of S$1.02 billion, swinging from a year-earlier net loss of S$506 million, on revenue of S$8.63 billion, up 31 percent on-year. The full year net profit was a six-year high.

Keppel proposed a final cash dividend of 21 Singapore cents a share, bringing the full year total to 33 Singapore cents a share.

Read more details about Keppel’s results.