Keppel Ltd. · SGX:BN4
Keppel — 9M 2019 Earnings Presentation
59 slides from Keppel's earnings presentation, Oct 17, 2019
Slide 1: 3Q & 9M 2019 Financial Results
3Q & 9M 2019 Financial Results 17 October 2019
Slide 2: Scope of Briefing
Scope of Briefing • Address by CEO • Group Financial Highlights by CFO Note: An agenda decision on a clarification in relation to capitalisation of borrowing costs by property developer under IAS 23 Borrowing Costs was finalised by the International Financial Reporting Standards Interpretations Comm
Slide 3: Address by CEO
Address by CEO 3
Slide 4: Financial Performance
Financial Performance Key highlights Net profit • Annualised ROE was 6.1% S$515m 813 • Free cash outflow of S$1,029m 121 9M 2019 net profit down 37% yoy in 9M 2019 vs inflow of S$815m in 9M 2018 9M 2018 had benefited from S$544m gains 515 from en-bloc sales and divestments S$m 12 • Net gearing was 0
Slide 5: Offshore & Marine
Offshore & Marine The FSRU, BW Paris, was delivered to BW LNG in August 2019
Slide 6: Offshore & Marine Key Highlights
Offshore & Marine Key highlights Net profit • Reached settlement agreement on projects with Sete Brasil S$18m 18 • Focus on execution 6 S$m 9M 2019 net profit compared to 9M 2018 net loss of S$38m 5 13 • Delivered an FSRU and a jackup 0 (1) • On track to deliver Singapore’s dual-fuel bunker tanker (
Slide 7: Quality Orderbook
Quality Orderbook Gas solutions and offshore renewables contributed S$2.4b in new orders over the past four years. New orders Net orderbooki 1.88 5.1 1.73 4.3 0.7 0.72 0.62 1.19 0.03 3.0 2.7 0.35 S$b 0.13 S$b 0.72 0.10 0.14 0.1 0.2 0.44 0.02 0.95 0.2 0.3 0.18 0.07 0.57 1.1 1.2 0.35 0.29 0 0 2016 201
Slide 8: Property
Property The Podium, an office and retail mixed-use development in Manila, was opened in September 2019
Slide 9: Property Key Highlights
Property Key highlights Net profit • Announced four acquisitions in China worth ~RMB1.1b in 3Q 2019 S$340m • Strengthening commercial 768 9M 2019 net profit down 56% yoy 39 portfolio with a focus on first-tier cities, catering to 9M 2018 had benefited from S$544m gains 177 high-tech sectors from en-
Slide 10: Property Home Sales
Property Home sales • Sold 3,520 units in 9M 2019, up 12% yoy, with total sales value 3,520 of ~S$2.1b 3,150 230 110 190 • Sale of 8,440 overseas units 740 worth ~S$3.1b recognisable 660 230 150 from 4Q 2019-2022 Units 200 • ~15,000 units launch-ready 2,330 1,830 from 4Q 2019-2021 0 9M 2018 9M 2019
Slide 11: Seizing Opportunities in Vietnam
Seizing Opportunities in Vietnam We are meeting the demand for quality homes and commercial spaces, driven by healthy economic growth and growing affluence in Vietnam. Net Profit (Vietnam) Keppel Land’s 9M 2019 Strong fundamentals in Ho Chi Minh City Net Profit by Geography • 88% absorption rate of
Slide 12: Infrastructure
Infrastructure Alpha DC Fund and Keppel Data Centres are injecting Keppel DC Singapore 4 to Keppel DC REIT
Slide 13: Infrastructure Key Highlights
Infrastructure Key highlights Net Profit • Keppel Infrastructure delivered stable earnings growth on S$145m 145 improved performance from Energy Infrastructure and 121 9M 2019 net profit up 20% yoy due mainly to Environmental Infrastructure 68 higher contribution from Keppel Infrastructure and the d
Slide 14: Executing Keppel's Business Model
Executing Keppel’s Business Model We harness the Group’s capabilities to create quality data centre assets ~S$430m ~S$270mi that we can own, manage and recycle Profit from the data centre business Market premium over for the best risk-adjusted returns. accrued to the Group from 2014-2018 on carrying
Slide 15: Investments
Investments Keppel REIT is unlocking value in Bugis Junction Towers in Singapore
Slide 16: Investments Key Highlights
Investments Key highlights Net Profit • Active quarter for Keppel Capital S$12m 12 24 • Keppel REIT is divesting Bugis Junction Towers for ~S$548m 9 S$m 9M 2019 net profit mainly due to higher 52 contribution from M1 and re-measurement gain 16 • Keppel DC REIT announced of previously held interest i
Slide 17: M1's Transformation
M1’s Transformation 1 2 3 4 B2C – Strengthen B2B – Future Build Drive consumer business growth engine digital capabilities regional expansion Synergies as part of Keppel to accelerate and amplify all aspects of transformation 17
Slide 18: Growing B2C Businesses
Growing B2C Businesses We are capturing cross selling opportunities to expand our consumer base and provide best value propositions for our customers. >2.2 million mobile lines Customer reachi Cross selling will drive • The Keppel Group serves • Increased share of ~90% of 1.3 million customer wallet
Slide 19: Environmental Sustainability
Environmental Sustainability Committed to providing Established targets for Will include environmental solutions that contribute reduction in carbon emissions, sustainability in performance to a sustainable future waste and water usage appraisal of senior management Avoid Maintain Grow & Expand High
Slide 20: Group Financial Highlights by CFO
Group Financial Highlights by CFO 20
Slide 21: 3Q 2019 Financial Performance
3Q 2019 Financial Performance Key highlights S$m 3Q 2019 3Q 2018 % Change Revenue 2,067 1,295 60 Net Profit 30% from net profit of ↑ S$227m to S$159m EBITDA 289 326 (11) EPS 30% from 12.5cts to ↑ 8.8cts Operating Profit 183 283 (35) Profit Before Tax 227 334 (32) Net Profit 159 227 (30) EPS (cents)
Slide 22: 3Q 2019 Revenue by Segment
3Q 2019 Revenue by Segment S$m 3Q 2019 % 3Q 2018 % % Change Offshore & Marine 632 30 416 32 52 Property 385 19 180 14 114 Infrastructure 742 36 674 52 10 Investments 308 15 25 2 >500 Total 2,067 100 1,295 100 60 22
Slide 23: 3Q 2019 Pre-tax Profit by Segment
3Q 2019 Pre-tax Profit by Segment S$m 3Q 2019 % 3Q 2018 % % Change Offshore & Marine 8 3 10 3 (20) Property 123 54 244 73 (50) Infrastructure 92 41 60 18 53 Investments 21 9 20 6 5 Less: Charges related to the (17) (7) - - n.m. acquisition of M1* Total 227 100 334 100 (32) * Charges included amortis
Slide 24: 3Q 2019 Net Profit by Segment
3Q 2019 Net Profit by Segment S$m 3Q 2019 % 3Q 2018 % % Change Offshore & Marine 8 5 2 1 300 Property 78 49 162 71 (52) Infrastructure 86 54 55 24 56 Investments 1 1 8 4 (88) Less: Charges related to the (14) (9) - - n.m. acquisition of M1* Total 159 100 227 100 (30) * Charges included amortisation
Slide 25: 9M 2019 Financial Performance
9M 2019 Financial Performance Key highlights S$m 9M 2019 9M 2018 % Change Net Profit ↑ 37% to S$515m Revenue 5,382 4,288 26 ROE from 9.4% to 6.1% ↑ EBITDA 940 1,182 (20) (Annualised) Operating Profit 665 1,049 (37) Free Cash ↑ from inflow of S$815m Flow to outflow of S$1,029m Profit Before Tax 716 1
Slide 26: 9M 2019 Revenue by Segment
9M 2019 Revenue by Segment S$m 9M 2019 % 9M 2018 % % Change Offshore & Marine 1,445 27 1,355 31 7 Property 1,013 19 967 23 5 Infrastructure 2,167 40 1,885 44 15 Investments 757 14 81 2 >500 Total 5,382 100 4,288 100 26 26
Slide 27: 9M 2019 Pre-tax Profit by Segment
9M 2019 Pre-tax Profit by Segment S$m 9M 2019 % 9M 2018 % % Change Offshore & Marine 13 2 (16) (1) n.m. Property 465 65 977 90 (52) Infrastructure 163 23 134 12 22 Investments 119 16 (15) (1) n.m. Less: Charges related to the (44) (6) - - n.m. acquisition of M1* Total 716 100 1,080 100 (34) * Charge
Slide 28: 9M 2019 Net Profit by Segment
9M 2019 Net Profit by Segment S$m 9M 2019 % 9M 2018 % % Change Offshore & Marine 18 3 (38) (5) n.m. Property 340 66 768 95 (56) Infrastructure 145 28 121 15 20 Investments 49 10 (38) (5) n.m. Less: Charges related to the (37) (7) - - n.m. acquisition of M1* Total 515 100 813 100 (37) * Charges inclu
Slide 29: Net Profit & EPS
Net Profit & EPS Net profit (S$m) EPS (Cents) 1,885 103.8 1,525 84.0 726 39.9 405 22.3 948 52.3 414 363 784 815 135 22.9 20.0 44.8 43.2 7.5 143 127 6.9 227 7.9 12.5 397 265 515 28.4 406 225 22.3 21.9 12.4 14.6 249 159 13.7 8.8 205 171 9.4 153 11.3 8.4 339 360 337 18.7 19.8 18.6 211 252 203 11.6 13.9
Slide 30: Free Cash Flow
Free Cash Flow S$m 9M 2019 9M 2018 Operating profit 665 1,049 Depreciation & other non-cash items 64 (537) 729 512 Working capital changes (1,494) (123) Interest & tax paid (363) (225) Net cash (used in)/from operating activities (1,128) 164 Investments & capex (252) (127) Divestments & dividend inc
Slide 31: Questions & Answers
Questions & Answers CGS] Corporation 31 ff
Slide 32: Additional Information
Additional Information CGS] Corporation 32 f
Slide 33: Revenue by Geography
Revenue by Geography • 43% of total revenue came from overseas customers Overseas Singapore Total 9M 2019 Customers Customers (S$m) (%) (%) Offshore & Marine 1,445 75 25 Property 1,013 86 14 Infrastructure 2,167 15 85 Investments 757 1 99 Total 5,382 33
Slide 34: EBITDA by Segment
EBITDA by Segment S$m 9M 2019 % 9M 2018 % % Change Offshore & Marine 134 14 94 8 43 Property 396 42 945 80 (58) Infrastructure 132 14 129 11 2 Investments 278 30 14 1 >500 Total 940 100 1,182 100 (20) 34
Slide 35: Capital/Gearing/ROE
Capital/Gearing/ROE S$m 30 Sep 2019 31 Dec 2018 Shareholders’ Funds 11,000 11,237 Total Equity 11,471 11,546 Net Debt i 10,047 5,567 i Net Gearing Ratio 0.88x 0.48x ROE 6.1% 8.3% i Net debt and net gearing ratio for 2019 included lease liabilities 35
Slide 36: Net Profit by Business Unit
Net Profit by Business Unit S$m 9M 2019 9M 2018 % Change Keppel Offshore & Marine 18 (38) n.m. Keppel Land i 345 767 (55) Keppel Infrastructure 94 82 15 Keppel Telecommunications & Transportation ii 54 37 46 Keppel Capital 53 55 (4) M1 iii 52 16 225 Share of SSTEC’s results 24 9 167 KCL, Others & El
Slide 37: Offshore & Marine
Offshore & Marine 37
Slide 38: Financial Highlights – Offshore & Marine
Financial Highlights – Offshore & Marine S$m 3Q 2019 3Q 2018 % Change 9M 2019 9M 2018 % Change Revenue 632 416 52 1,445 1,355 7 EBITDA 64 29 121 134 94 43 Operating Profit 33 6 450 47 20 135 Profit/(Loss) Before Tax 8 10 (20) 13 (16) n.m. Net Profit/(Loss) 8 2 300 18 (38) n.m. 38
Slide 39: Operational Review
Operational Review ▪ About S$1.88b in contracts secured in 9M 2019: A semi-submersible, 2 FPSO conversions, an FLNG conversion, a dual-fuel dredger, an offshore high voltage direct current converter station and an onshore converter station, and 2 offshore wind farm substations ▪ Project deliveries i
Slide 40: Orderbook
Orderbook Contract Value S$m Gross Net Client For delivery in 2019 6 JUs/1 FPSO Modules Fabrication & Integration/1 TLWP Engineering & Construction Services Support/1 Dredger/1 LNG Grupo R/Clearwater/BorrDrilling/Fecon/Petrobras/ Carrier/1 Production Barge/1 Dual-fuel Bunker Tanker 3,103 70 PTSC/Sto
Slide 41: Property
Property 41
Slide 42: Financial Highlights - Property
Financial Highlights - Property S$m 3Q 2019 3Q 2018 % Change 9M 2019 9M 2018 % Change Revenue 385 180 114 1,013 967 5 EBITDA 105 230 (54) 396 945 (58) Operating Profit 95 222 (57) 365 921 (60) Profit Before Tax 123 244 (50) 465 977 (52) Net Profit 78 162 (52) 340 768 (56) 42
Slide 43: Sales Achieved - Overseas
Sales Achieved - Overseas Key Projects Location Units Sold in 9M 2019 Sales Value in 9M 2019 Latest Avg. Selling Price China (RMB’m) (RMB’psm) City Park (Tianfu New Area) Chengdu 197 463 ~20,300 Waterfront Residences 277 1,436 ~23,900 Park Avenue Heights Wuxi 245 474 ~17,400 Seasons Residences 214 5
Slide 44: Residential Landbank - Singapore
Residential Landbank - Singapore Total GFA Total Units Remaining Remaining Area Stake Tenure Units Sold (sf) Units Launched Units For Sales (sf) Launched Projects The Garden Residences 60% 99-yr 462,561 613 260 202 411 345,907 Corals at Keppel Bay 100% 99-yr 509,998 366 366 303 63 133,666 Reflection
Slide 45: Residential Landbank - China
Residential Landbank - China Total GFA Total Units Units Remaining Units Remaining Area Location Stake (sm) Units Launched Sold For Sale For Sale (sm) 8 Park Avenue 99% 131,957 918 918 902 16 4,576 Seasons Residences Shanghai 100% 125,281 1,102 1,062 1,059 43 5,335 Sheshan Riviera 99.4% 90,109 217 5
Slide 46: Residential Landbank - Other Overseas
Residential Landbank - Other Overseas Total GFA Total Units Units Remaining Remaining Area Location Stake (sm) Units Launched Sold Units For Sale For Sale (sm) Vietnam Saigon Sports City 100% 793,075 4,284 - - 4,284 458,326 Palm City 42% 486,505 3,039 1,587 1,545 1,494 146,896 Empire City HCMC 40% 6
Slide 47: Residential Launch Readiness – China
Residential Launch Readiness – China Units Ready to Launch Project Location 4Q 2019 2020 2021 8 Park Avenue 16 - - Seasons Residences Shanghai 1 42 - Sheshan Riviera 4 33 51 Hill Crest Villas - - 42 Serenity Villas Chengdu 14 83 94 City Park (Tianfu New Area) 183 392 - Waterfront Residences 51 463 5
Slide 48: Residential Launch Readiness – Other Overseas
Residential Launch Readiness – Other Overseas Units Ready to Launch Project Location 4Q 2019 2020 2021 Indonesia West Vista at Puri 69 320 320 The Riviera at Puri 31 - - Jakarta BCA site - 300 151 Metland Menteng Devt 186 195 176 Vietnam Saigon Sports City Velona at Saigon Sports City - 850 305 Saig
Slide 49: Expected Completion for Launched Projects
Expected Completion for Launched Projects Total Units Launched as at Units Sold as at Units Remaining Expected Projects/Phases launched Location Units end-Sep 2019 end-Sep 2019 as at end-Sep 2019 Completion China Seasons Residences (Ph 3A) 572 572 572 - 1H20 Seasons Residences (Ph 3B) 346 322 269 77
Slide 50: Expected Completion for Upcoming Projects
Expected Completion for Upcoming Projects No. of Units Expected to be Completed Projects/Phases to be launched Location 2019 2020 2021 China Sheshan Riviera Shanghai - - 105 Serenity Villas Chengdu - 144 - Waterfront Residences - 468 56 Park Avenue Heights Wuxi - - 232 Seasons Residences - - 1,062 W
Slide 51: Commercial Projects - Under Development
Commercial Projects - Under Development Projects under Development Location Stake GFA (sm) Development Cost^ Completion China Park Avenue Central Shanghai 99% 115,950 RMB3.8b 2023 Seasons City Tianjin 100% 161,800 RMB2.6b 2020 (Ph 1) Indonesia IFC Jakarta Tower 1 Jakarta 100% 92,500 S$270m 2025 Viet
Slide 52: Commercial Projects - Completed
Commercial Projects - Completed Key Completed Projects Location Stake GFA (sm) Net Lettable Area (sm) Completion Singapore Keppel Bay Tower 100% 41,800 36,000 2002 Keppel Towers and Keppel Towers 2 Singapore 100% 58,600 45,400 1991/1993 I12 Katong 100% 26,200 19,600 2011* China Trinity Tower 30% 70,
Slide 53: Infrastructure
Infrastructure CGS] Corporation 53 ff
Slide 54: Financial Highlights - Infrastructure
Financial Highlights - Infrastructure S$m 3Q 2019 3Q 2018 % Change 9M 2019 9M 2018 % Change Revenue 742 674 10 2,167 1,885 15 EBITDA 65 55 18 132 129 2 Operating Profit 49 44 11 88 96 (8) Profit Before Tax 92 60 53 163 134 22 Net Profit 86 55 56 145 121 20 54
Slide 55: Investments
Investments CGS] Corporation 55 Of
Slide 56: Financial Highlights - Investments
Financial Highlights - Investments S$m 3Q 2019 3Q 2018 % Change 9M 2019 9M 2018 % Change Revenue 308 25 >500 757 81 >500 EBITDA 55 12 358 278 14 >500 Operating Profit 6 11 (45) 165 12 >500 Profit/(Loss) Before Tax 4 20 (80) 75 (15) n.m. Net (Loss)/Profit (13) 8 n.m. 12 (38) n.m. 56
Slide 57: Residential Land Sales at Tianjin Eco-City
Residential Land Sales at Tianjin Eco-City Selling Price Sales Value Land Area GFA Plot Date Plot Ratio Based on (RMB’m) (Hectare) (sm) Based on GFA Land Area (RMB/sm) (RMB’m/hectare) Plot 30c Sep 2019 438 2.77 3.1 84,500 158 5,200 Plot 34 Aug 2019 1,017 9.21 1.6 141,800 110 7,200 Plot 20b Dec 2018
Slide 58: M1 Operational Highlights
M1 Operational Highlights Revenue Customers 2,280 838 2,150 782 219 204 281 565 214 Handset/Equipment 584 sales 32 26 ‘000 Fibre S$m International call 106 123 services Prepaid Fixed services Postpaid 1,496 1,362 Mobile services 430 408 0 0 9M 2018 9M 2019 End-Sep 2018 End-Sep 2019 58
Slide 59: This presentation may contain forward-looking statements which are subject to risks and uncertainties that
This presentation may contain forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. Such risks and uncertainties include industry and economic conditions, competition, and legal, governmental and regulatory