The decline in earnings was due primarily to the absence of gains from the group’s divestment of a commercial development in Beijing, as well as higher net interest expenses. This was partially offset by higher contributions from associated companies and property trading projects in China and Singapore.
Revenue for the quarter surged 60% to $2.07 billion, from $1.30 billion in 2Q18. This was spearheaded by higher recognition from offshore and marine, property and infrastructure projects, coupled with increased sales in the power and gas business and the consolidation of M1’s results.
Notably, share of results of associated companies soared to $77.8 million, close to doubling from $39.4 million in 3Q18.
The increase was due to the dilution gain arising from Keppel DC REIT’s private placement exercise and higher contributions from Energy Infrastructure and Environmental Infrastructure businesses. This was partly offset by lower contributions from Infrastructure Services and the logistics business, and absence of gain arising from the sale of stake in Keppel DC REIT in 3Q18.
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As at end-September, cash and cash equivalents stood at $1.32 billion.
The group’s net gearing ratio increased from 48% at end-December 2018 to 88% at end-September 2019, driven largely by an increase in group net debt.
In its outlook statement, the group says it will continue to execute its multi-business strategy, capturing value by harnessing its core strengths and growing collaboration across divisions to unleash potential synergies, while being agile and investing in the future.
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“Amidst a volatile international environment marked by trade tensions and slowing global growth, Keppel has performed creditably, with stronger contributions from the Offshore & Marine (O&M), Infrastructure and Investments divisions,” says Loh Chin Hua, CEO of Keppel Corp.
Shares in Keppel Corp closed 2 cents lower, or 0.33% down, at $5.96 on Thursday before the results announcement.
