SINGAPORE (Jan 25): Keppel Corp has still not recovered from the offshore and marine slump. Its O&M division continued to make a loss last year.

For FY18, Keppel Corp announced earnings of $944 million, up 382% from $196 million in 2017, or up 16% from $815 million, excluding the one-off penalty of $619 million for global resolution with the authorities in the US, Brazil and Singapore. Property was the biggest earnings contributor for the fourth consecutive year.

See: Keppel reverses out of the red in 4Q with earnings of $135 mil on absence of graft-linked penalty and costs

Keppel O&M incurred a small loss of $6 million for FY18, because of $167 million additional provision for losses on semi-subs for Sete Brasil and $32 million impairments on other assets in 4Q18. Capex cuts by the oil majors, coupled with the write-downs from Sete Brasil, continued to impact Keppel O&M’s profitability.

In the next 10 years or so, LNG will be playing a role as a bridge fuel as the world moves from fossil fuels to renewables. As a result, LNG is likely to be a major beneficiary of the climate change agenda.

Expanding its involvement in the LNG space, Keppel O&M has signed several contracts.

Moreover, property has been the main earnings driver for the group since Keppel Land’s privatisation in 2015, with FY18 earnings from the property division contributing $938 billion to net profit.

In Sept 2018, Keppel also announced that it will be privatising M1 and Keppel Telecommunications & Transportation.

Find out more in this week’s The Edge Singapore (Issue 866, week of Jan 28), on sale now at newsstands. Subscribers can log in and read the story or click here to subscribe