SINGAPORE (Apr 18): Keppel Corporation saw its earnings fall 39.9% to $202.9 million for the 1Q19 ended March, from $337.5 million a year ago.

The decline was mainly attributable to the absence of a $289 million gain in 1Q18 arising from the en bloc sale of Keppel Cove in Zhongshan, China.

In 1Q19, the group recorded gains of $174 million from the divestment of a 70% interest in Dong Nai Waterfront City, Vietnam and the re-measurement of previously held interests in M1 at acquisition date

Consequently, other operating income was halved to $145.6 million in 1Q19, from $300.0 million a year ago.

1Q19 revenue grew 4.1% to $1.53 billion, from $1.47 billion a year ago.

The increase was underpinned by higher revenues from power and gas sales, infrastructure projects in Singapore and Hong Kong, asset management and the consolidation of M1, offset by lower contributions from property trading in Singapore.

Keppel Corp’s Offshore & Marine (O&M) Division registered a net profit of $6 million for 1Q19, compared to a net loss of $23 million a year ago.

This was due mainly to a share of results from associated companies which turned profitable year on year, as well as lower taxes.

The Property Division – the largest contributor to the group’s 1Q19 net profit – recorded a net profit of $132 million, 65% lower than $378 million a year ago.

This was due mainly to the absence of gains from the en bloc sale of Keppel Cove in Zhongshan, China and lower contribution from Singapore property trading. The decline was partly offset by gains from disposing a partial interest in Dong Nai Waterfront City, Vietnam.

The Infrastructure Division’s net profit of $16 million for 1Q19 was 38% lower than a year ago.

This was mainly due to lower contributions from the energy infrastructure and logistics businesses, as well as a share of losses from Keppel Infrastructure Trust in the current period.

Earnings per share (EPS) fell 40% to 11.2 cents.

As at end March, cash and cash equivalents stood at $1.72 billion.

“The main pieces of our strategic transformation are in place. Our focus is now on execution. When we have successfully executed on our strategy, Keppel will be a powerhouse of urbanisation solutions, with not only higher profits, but also higher quality, recurrent earnings,” says Loh Chin Hua, CEO of Keppel Corp.

“We will work all our engines hard towards achieving a mid-to-long term ROE target of 15% for the group,” he adds.

Shares in Keppel Corp closed 0.3% lower at $6.74 on Thursday, before the announcement.