Keppel Corporation (Keppel Corp) says it has returned to profitability in 3QFY2020 compared to the net loss of $697 million in 2QFY2020.

The group did not release any figures, however, only stating that net profit for 3QFY2020 was “significantly lower year-on-year”.

With the exception of Keppel Offshore & Marine (Keppel O&M), all business units registered profits in the quarter.

According to the group, Keppel O&M remained loss-making in 3QFY2020 mainly due to a reduction in its top line due to Covid-19-related disruptions. It says it foresees the segment continuing to face “challenges in profitability” for the rest of the year.

For the 9MFY2020 though, Keppel Corp posted revenue of $4.82 billion, down 10.5% compared to the $5.38 billion in 9MFY2019. The decrease was due mainly to lower contributions from Keppel O&M.

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The group says it remains loss-making for the 9MFY2020 due to the impairments of $919 million, mainly arising from the offshore and marine business recorded in 2QFY2020.

Segmentally, only the group’s Connectivity business registered a y-o-y growth to $883 million from the $785 million a year ago.

For the 9MFY2020, Keppel O&M saw a 21.4% decline y-o-y in revenue to $1.1 billion, while Keppel Infrastructure’s revenue for the same period dropped 15% y-o-y to $1.7 billion.

Keppel Land sold some 2,030 homes in the 9MFY2020, compared to 3,520 units the year before, which translates to a 28.6% drop y-o-y to $1.5 billion in home sales value.

While home sales in Singapore picked up, sales were slower in China and Vietnam. This was due to economic headwinds and fewer new project launches in China, and slower approval for new launches in Vietnam.

Keppel’s telco arm M1 also saw a decline in revenue to $779 million in the 9MFY2020 from $838 million a year ago, though M1’s earnings before interest, taxes, depreciation and amortisation (EBITDA) “remained resilient” at $202 million for the period, compared to $211 million in 9MFY2019.

As at Sept 30, the group’s net gearing was lower at 0.96x compared to the 1.00x as at June 30 mainly due to lower working capital requirements.

In the 9MFY2020, Keppel Capital’s asset management fees grew 17.1% y-o-y to $123 million mainly due to contributions from new fund initiatives.

Loh Chin Hua, CEO of Keppel Corporation, said, “Keppel’s key businesses have performed resiliently in the third quarter of 2020, with all key business units remaining profitable, except for Keppel O&M which continues to face very challenging conditions due to both the downturn in the sector and the reduced top line resulting from the COVID19 pandemic and measures to contain its spread.”

“On 29 September 2020, we announced plans to accelerate our Vision 2030 roadmap that will ready Keppel to weather the challenging environment and chart our growth path. To this end, we have established a Vision 2030 transformation office and launched a 100-day programme to drive results.”

“In line with our Vision 2030 strategy, in the past month, we have announced about $140 million in asset divestments from our landbank and non-core assets, and also secured an offshore renewables contract worth about S$600 million. We are also actively working with Keppel O&M’s Board and Management on the strategic review of this business, including exploring the full spectrum of organic and inorganic options,” he added.

Shares in Keppel Corp closed 7 cents lower or 1.6% down at $4.27 on Oct 29, prior to this announcement.