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Keppel Corp’s Q4 net profit up 8.9%

Keppel Corporation has posted a higher fourth-quarter net profit, up 8.9 per cent to S$332 million from a year earlier.

SINGAPORE: Keppel Corporation has posted a higher fourth-quarter net profit, up 8.9 per cent to S$332 million from a year earlier.

This came amid a healthier showing by its offshore and marine unit which offset losses incurred on its infrastructure business.

But overall net profit for the full year in 2013 came in lower.

Keppel Corp's 2013 full year net profit declined 17.5 per cent to S$1.85 billion.

The fall came on the back of lower group revenue which fell 11.3 per cent to S$12.4 billion.

The sharp decline in earnings was also due to the higher earnings base recorded in 2012 as it included one-off earnings from property sales.

In 2012, sale of units from Reflections at Keppel Bay as well as disposal of an equity investment amounted to over S$650 million substantially boosted Keppel's bottom line.

Still, the conglomerate remained upbeat on its financial performance last year.

Keppel Corp’s chief executive officer Loh Chin Hua said: “Operating net profit for 2013 has been encouraging despite the uncertainties. Keppel Land and Keppel T&T reported stronger earning numbers for the year.

"However, the EPC (engineering, procurement and construction) contracts in Doha North and Runcorn continue to face challenges and we had to take additional provisions at the year end.”

Keppel Corp’s offshore and marine arm in 2013 contributed to the same level of net profit as in 2012, contributing to two thirds of total net profit.

Some analysts said Keppel Corp has performed in line with expectations, particularly in maintaining profit margins from the offshore and marine arm.

Vincent Fernando, director for ASEAN research at Religare Capital, said: "I thought it was comforting they mentioned how they are not going to chase any work right now. They are only going to take work where they are going to earn a reasonable return.

“I do think it will get more challenging as competition increases, especially once Keppel gets a bit more urgency to fill its yards. But currently, the yards are pretty busy. So I guess they can be a lot more selective in the yards they take. "

Last year, Keppel took orders worth about S$7 billion -- mainly for jackup rigs -- pushing its total outstanding orders to a record S$14.2 billion at end-December.

Keppel Corp declared a final dividend of 30 cents per share for the year. 

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