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Keppel reverses Q4 losses, posts S$135 million net profit

KEPPEL Corporation posted S$135 million in its fourth-quarter earnings, reversing a loss of S$492 million a year ago, which had included the S$619 million one-off financial penalty and related costs arising from Keppel Offshore & Marine (O&M)'s global resolution with criminal authorities over its corruption scandal.

Excluding the one-off hefty financial penalty, the group's net profit for the quarter would have been 6 per cent higher year on year, underpinned by improved performance of the O&M division.

However, operating profit for the quarter decreased by 97 per cent to S$5 million despite registering higher revenues. This was attributed mainly to lower fair value gains on investment properties in the property division, higher provisions for expected losses on the rigs for Sete Brasil contracts and provision for impairment of an associated company in the investments division.

Profit before tax decreased by a smaller extent of 19 per cent, mainly due to higher share of profits from associated companies, mainly Sino-Singapore Tianjin Eco-City, Floatel International and Keppel DC REIT.

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Earnings per share was 7.4 Singapore cents, up from 6.9 Singapore cents in the fourth quarter of 2017.

The group’s revenue for the three months ended December 2018 was S$1,677 million, 9 per cent higher than the S$1,545 million achieved a year ago. All divisions, except the property division, registered higher revenues during the quarter.

Keppel Corp chief executive Loh Chin Hua said in a results briefing that while there is growing optimism in the O&M sector and signs of improvements in the offshore rig sector, a V-shaped recovery is not envisaged.

Directors of the group will be proposing a final dividend of 15 Singapore cents per share. Including the interim cash dividend of 10 Singapore cents per share and special cash dividend of five Singapore cents per share paid to shareholders in August 2018, the total distribution for the full year will be 30 Singapore cents per share, compared to the 22 Singapore cents per share for 2017.

Mainboard-listed Keppel closed at S$6.13 on Thursday, adding two Singapore cents before the financial results were announced.