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Keppel T&T's Q1 net profit shrinks by 16% as operating loss widens
KEPPEL Telecommunications & Transportation (Keppel T&T) saw earnings slide in the first quarter on the back of higher expenses, according to unaudited financial results released on Tuesday evening.
Revenue climbed by 5.1 per cent on the previous year to S$42.81 million, for the three months to March 31.
But a rise in spending devoured revenue growth, with the company running at a widening operating loss of S$3.43 million - more than double the S$1.67 million in the year before.
At the end of the day, net profit attributable to shareholders fell by 16.3 per cent to S$9.43 million.
Keppel T&T's share of results from associated companies and joint ventures helped the company to stay in the black, but these contributions were still down by 3.6 per cent year-on-year to S$15.99 million.
The company is split into three business segments - logistics, data centres and investments. Facility and project management fees have helped to push up the income from the fledgling data centre division, which partially offset the weaker contribution from logistics operations in China.
Still, manpower costs rose in both logistics and data centres as headcount went up, while the new channel management business in the logistics division incurred higher overheads.
The logistics division - which accounts for the lion's share of Keppel T&T's revenue - ran at a net loss of S$2.46 million, with revenue dipping by S$734,000 to S$34.1 million on lower container throughput in China. A strategic review of the company's Chinese logistics portfolio is ongoing.
Meanwhile, the company has upped its stake in the UrbanFox subsidiary - an end-to-end logistics provider targeting the e-commerce market - from 59.6 per cent to 85 per cent.
Keppel T&T's other two business segments - data centres and investments - stayed profitable for the quarter.
The second-phase fit-out of the Keppel DC Singapore 4 centre is slated to be completed in the second quarter of 2018. "To date, it has secured a healthy occupancy rate and a pipeline of interests from key customers," the company said in its financial results announcement.
"In addition, efforts are being intensified to pursue new asset development and acquisition opportunities to expand into new markets."
Earnings per share stood at 1.7 Singapore cents, against two Singapore cents the year before.
Chief executive Thomas Pang said in a statement: "We shall continue to optimise cost, improve margins and also intensify efforts to pursue new asset development and acquisition opportunities for better returns."
Keppel T&T closed down by one Singapore cent, or 0.63 per cent, to S$1.57, before the announcement.