Keppel Ltd. · SGX:BN4
Keppel — H1 2020 Earnings Presentation
64 slides from Keppel's earnings presentation, Jul 30, 2020
Slide 1: 2Q & 1H 2020 Financial Results
2Q & 1H 2020 Financial Results 30 July 2020
Slide 2: Scope of Briefing
Scope of Briefing • Address by CEO • Group Financial Highlights by CFO 2
Slide 3: Address by CEO
Address by CEO 3
Slide 4: Financial Performance
Financial Performance Key highlights Net (loss)/profit • Excluding impairments in both (S$537m) 356 25 years, 1H 2020 net profit was S$393m, up 5% from S$375m 252 in 1H 2019 1H 2020 net loss compared to 1H 2019 net profit 59 of S$356m, after S$930m of impairments mostly 262 197 in relation to the Of
Slide 5: Offshore & Marine
Offshore & Marine Net (loss)/profit • 1H 2020 net loss was S$959m, after S$890m in impairments for contract assets, doubtful debts, stocks and investment, including share of Floatel’s impairment provisions 9 10 6 0 3 • EBITDA for 1H 2020 was positive at S$40m before impairments (5) • Significant red
Slide 6: Offshore & Marine
Offshore & Marine Net orderbooki • Net orderbook of S$3.5b as at end-Jun 2020 will keep Keppel O&M busy for at least two years 4.4 • Delivered 3 newbuild projects and an FPSO project in 1H 2020 0.7 3.5 • Terminated a mid-water semi contract with Awilco 0.6 2.4 • YTD new contracts of S$107m from offs
Slide 7: Property
Property Net profit • About S$3.9b in dividends received from Keppel Land since 2015, well above S$3.1b privatisation cost 262 • Capital reallocated to fund other new initiatives such as asset 22 management and data centres 197 • 1H 2020 net profit of S$197m 112 24 • Lower yoy mainly due to lower di
Slide 8: Property
Property Home sales • COVID-19 impact varies across key markets • Singapore – Home sales slowed while impact on office space 2,100 remains muted 190 50 • China – Market continues to recover 110 • Vietnam – Market remains healthy but launch of new projects 610 1,230 30 pending approval of authorities
Slide 9: Infrastructure
Infrastructure Net profit • 1H 2020 net profit of S$252m, underpinned by • Improved core earnings across Energy Infrastructure, Environmental 252 Infrastructure and Infrastructure Services 2 44 • Gain of S$131m from reclassification of Keppel Infrastructure Trust • Unlocking value - S$47m in gains f
Slide 10: Infrastructure
Infrastructure Keppel Infrastructure • Secured WTE and district cooling contracts across Singapore, India and Thailand • Keppel Marina East Desalination Plant commenced 25-year operations phase on 29 Jun 2020 Data Centres • Work from home driving further demand for data centres Tuas Nexus Integrated
Slide 11: Investments
Investments Net (loss)/profit • 1H 2020 net loss was S$27m mainly due to fair value loss on investments 25 29 • Asset management 39 S$m 40 31 • Keppel Capital-managed funds received total commitments of 37 47 US$1.5b YTD from investors including pension and sovereign 0 wealth funds (52) • Launched n
Slide 12: Investments
Investments M1 • Resilient underlying performance - 1H 2020 EBITDA of S$141m was stable yoy • Added ~34,000 postpaid customers YTD while prepaid and roaming revenues were lower • Transforming from telco to digital connectivity platform • Driving transformation and digitalisation efforts including re
Slide 13: We will continue to work as a Group to deliver value to our stakeholders
We will continue to work as a Group to deliver value to our stakeholders, with a bold long- term vision, which transcends the impact of the current crisis. Keppel Marina East Desalination Plant
Slide 14: Group Financial Highlights by CFO
Group Financial Highlights by CFO 14
Slide 15: 2Q 2020 Financial Performance
2Q 2020 Financial Performance Key highlights S$m 2Q 2020 2Q 2019 % Change Revenue 1,325 1,784 (26) Net Profit ↑ from net profit of S$153m to net loss of S$697m EBITDA (322) 262 n.m.f. EPS from 8.4cts to negative ↑ 38.3cts Operating (Loss)/Profit (422) 160 n.m.f. (Loss)/Profit Before Tax (604) 206 n.
Slide 16: 2Q 2020 Revenue by Segment
2Q 2020 Revenue by Segment S$m 2Q 2020 % 2Q 2019 % % Change Offshore & Marine 270 20 481 27 (44) Property 209 16 271 15 (23) Infrastructure 559 42 726 41 (23) Investments 287 22 306 17 (6) Total 1,325 100 1,784 100 (26) 16
Slide 17: 2Q 2020 Pre-tax Profit by Segment
2Q 2020 Pre-tax Profit by Segment S$m 2Q 2020 % 2Q 2019 % % Change Offshore & Marine (967) 160 4 2 n.m.f. Property 233 (39) 161 78 45 Infrastructure 91 (15) 51 25 78 Investments 39 (6) (10) (5) n.m.f. Total (604) 100 206 100 n.m.f. n.m.f. denotes No Meaningful Figure 17
Slide 18: 2Q 2020 Net Profit by Segment
2Q 2020 Net Profit by Segment S$m 2Q 2020 % 2Q 2019 % % Change Offshore & Marine (962) 138 4 3 n.m.f. Property 162 (23) 130 85 25 Infrastructure 78 (11) 43 28 81 Investments 25 (4) (24) (16) n.m.f. Total (697) 100 153 100 n.m.f. n.m.f. denotes No Meaningful Figure 18
Slide 19: 2Q 2020 Impairments
2Q 2020 Impairments S$m 1Q 2020 2Q 2020 1Q 2019 2Q 2019 Doubtful debt on receivables in O&M Division - (179) - - Contract assets in O&M Division - (431) - - Stocks in O&M Division - (42) - - Investment in KrisEnergy (18) - (19) - Share of Floatel's impairment of vessels (1) (227) - - Fair value loss
Slide 20: 2Q 2020 Financial Performance (excluding impairments)
2Q 2020 Financial Performance (excluding impairments) Key highlights S$m 2Q 2020 2Q 2019 % Change Net Profit ↑ from S$153m to S$222m Revenue 1,325 1,784 (26) EPS ↑ from 8.4cts to 12.2cts EBITDA 370 262 41 Operating Profit 270 160 69 Profit Before Tax 315 206 53 Net Profit 222 153 45 EPS (cents) 12.2
Slide 21: 1H 2020 Financial Performance
1H 2020 Financial Performance Key highlights S$m 1H 2020 1H 2019 % Change Net Profit ↑ from net profit of S$356m to net loss of S$537m Revenue 3,182 3,315 (4) ROE ↑ from 6.3% to negative EBITDA 52 651 (92) (Annualised) 10.3% Operating (Loss)/ Profit (149) 482 n.m.f. Free Cash ↑ from outflow of S$563
Slide 22: 1H 2020 Revenue by Segment
1H 2020 Revenue by Segment S$m 1H 2020 % 1H 2019 % % Change Offshore & Marine 839 26 813 24 3 Property 511 16 628 19 (19) Infrastructure 1,256 40 1,425 43 (12) Investments 576 18 449 14 28 Total 3,182 100 3,315 100 (4) 22
Slide 23: 1H 2020 Pre-tax Profit by Segment
1H 2020 Pre-tax Profit by Segment S$m 1H 2020 % 1H 2019 % % Change Offshore & Marine (963) 270 5 1 n.m.f. Property 326 (91) 342 70 (5) Infrastructure 273 (77) 71 14 285 Investments 7 (2) 71 15 (90) Total (357) 100 489 100 n.m.f. n.m.f. denotes No Meaningful Figure 23
Slide 24: 1H 2020 Net Profit by Segment
1H 2020 Net Profit by Segment S$m 1H 2020 % 1H 2019 % % Change Offshore & Marine (959) 179 10 3 n.m.f. Property 197 (37) 262 74 (25) Infrastructure 252 (47) 59 16 327 Investments (27) 5 25 7 n.m.f Total (537) 100 356 100 n.m.f. n.m.f. denotes No Meaningful Figure 24
Slide 25: 1H 2020 Impairments
1H 2020 Impairments S$m 1H 2020 1H 2019 Doubtful debt on receivables in O&M Division (179) - Contract assets in O&M Division (431) - Stocks in O&M Division (42) - Investment in KrisEnergy (18) (19) Share of Floatel's impairment of vessels (228) - Fair value loss on investment in Floatel (10) - Other
Slide 26: 1H 2020 Financial Performance (excluding impairments)
1H 2020 Financial Performance (excluding impairments) Key highlights S$m 1H 2020 1H 2019 % Change Net Profit ↑ from S$375m to S$393m Revenue 3,182 3,315 (4) ROE ↑ from 6.6% to 6.9% (Annualised) EBITDA 754 670 13 Operating Profit 553 501 10 Profit Before Tax 573 508 13 Net Profit 393 375 5 EPS (cents
Slide 27: Net Profit & EPS
Net Profit & EPS Net profit (S$m) EPS (Cents) 1,525 84.0 405 22.3 948 52.3 363 784 815 20.0 43.2 44.8 7.5 135 38.9 127 707 7.9 6.9 143 227 12.5 192 21.9 10.5 397 225 265 12.4 14.6 249 159 13.7 8.8 205 171 11.3 9.4 153 8.4 360 337 19.8 13.9 18.6 211 252 203 160 11.6 11.2 8.8 (697) (38.3) (537) (29.5)
Slide 28: ROE & Dividend
ROE & Dividend 14.2% i 8.4% 6.9% 6.9% 6.3% 34 30 20 22 20 12 15 ii 3 8 8 8 2015 2016 2017 2018 2019 2020 (10.3%) 2015 2016 2017 2018 2019 2020 ROE Interim Dividend Full-Year Dividend i Excludes one-off financial penalty from global resolution & related costs ii Includes special cash dividend of 5.0c
Slide 29: Free Cash Flow
Free Cash Flow S$m 1H 2020 1H 2019 Operating profit (149) 482 Depreciation & other non-cash items (97) (48) Provisions made for stocks, contract assets and doubtful debts 676 5 Working capital changes (660) (1,052) Interest & tax paid (149) (232) Net cash used in operating activities (379) (845) Inv
Slide 30: Questions & Answers
Questions & Answers [TT Corporation 30 f
Slide 31: Additional Information
Additional Information [<I Corporation 3 ff
Slide 32: Revenue by Geography
Revenue by Geography • 38% of total revenue came from overseas customers Overseas Singapore Total 1H 2020 Customers Customers (S$m) (%) (%) Offshore & Marine 839 72 28 Property 511 79 21 Infrastructure 1,256 14 86 Investments 576 1 99 Total 3,182 32
Slide 33: EBITDA by Segment
EBITDA by Segment S$m 1H 2020 % 1H 2019 % % Change Offshore & Marine (622) (1,196) 70 11 n.m.f. Property 308 592 291 45 6 Infrastructure 258 496 67 10 285 Investments 108 208 223 34 (52) Total 52 100 651 100 (92) n.m.f. denotes No Meaningful Figure 33
Slide 34: Multiple Income Streams
Multiple Income Streams S$m 1H 2020 1H 2019 % Change Recurring Income 119 145 (18) EPC/Development for Sale 55 121 (55) Revaluation 113 56 102 Profit from Capital Recycling 81 66 23 Others (incl. impairment) (905) (32) >500 Net Profit (537) 356 n.m.f. n.m.f. denotes No Meaningful Figure 34
Slide 35: Capital/Gearing/ROE
Capital/Gearing/ROE S$m 30 Jun 2020 31 Dec 2019 Shareholders’ Funds 10,381 11,211 Total Equity 10,813 11,646 Net Debt i 10,817 9,874 i Net Gearing Ratio 1.00x 0.85x ROE (10.3%) 6.3% i Net debt and net gearing ratio included lease liabilities 35
Slide 36: Net Profit by Business Unit
Net Profit by Business Unit S$m 1H 2020 1H 2019 % Change Keppel Offshore & Marine (959) 10 n.m.f. Keppel Land i 217 258 (16) Keppel Infrastructure 206 56 268 Keppel Telecommunications & Transportation ii 51 12 325 Keppel Capital 47 37 27 M1 iii 40 31 29 Share of SSTEC’s results 29 (11) n.m.f. KCL, O
Slide 37: Offshore & Marine
Offshore & Marine 37
Slide 38: Financial Highlights – Offshore & Marine
Financial Highlights – Offshore & Marine S$m 2Q 2020 2Q 2019 % Change 1H 2020 1H 2019 % Change Revenue 270 481 (44) 839 813 3 EBITDA (680) 39 n.m.f. (622) 70 n.m.f. Operating (Loss)/Profit (710) 11 n.m.f. (682) 14 n.m.f. (Loss)/Profit Before Tax (967) 4 n.m.f. (963) 5 n.m.f. Net (Loss)/Profit (962)
Slide 39: Operational Review
Operational Review • Secured S$89m of new orders in 1H 2020: • Fabrication of leg component for an offshore wind turbine installation vessel, and an FPSO topside fabrication & integration • Project deliveries in 1H 2020: • 2 jackup rig, 1 dual-fuel bunker tanker and an FPSO modification and upgrade
Slide 40: Orderbook
Orderbook Contract Value S$m Gross Net Client For delivery in 2020 Clearwater/Fecon/Petrobras/Modec/*Name 4 JUs/3 FPSO Modules Fabrication & Integration*/1 Semi*/ withheld/KrisEnergy/Stolt-Nielsen/Shturman 1 Production Barge/2 LNG Carriers/2 LNG Bunkering Koshelev/FueLNG/Pasha Hawaii/Jan De Vessels/
Slide 41: Property
Property [<I Corporation af
Slide 42: Financial Highlights - Property
Financial Highlights - Property S$m 2Q 2020 2Q 2019 % Change 1H 2020 1H 2019 % Change Revenue 209 271 (23) 511 628 (19) EBITDA 210 110 91 308 291 6 Operating Profit 201 98 105 290 270 7 Profit Before Tax 233 161 45 326 342 (5) Net Profit 162 130 25 197 262 (25) 42
Slide 43: Sales Achieved - Overseas
Sales Achieved - Overseas Sales Value in Key Projects Location Units Sold in 1H 2020 Latest Avg. Selling Price 1H 2020 China (RMB’m) (RMB’psm) City Park Chengdu 99 296 ~22,100 Waterfront Residences 317 1,125 ~24,000 Wuxi Seasons Residences 249 648 ~21,300 China Chic Nanjing 304 1,200 ~31,700 Total 9
Slide 44: Residential Landbank - Singapore
Residential Landbank - Singapore Total GFA Total Units Units Remaining Remaining Area Stake Tenure (sf) Units Launched Sold Units For Sales (sf) Launched Projects The Garden Residences 60% 99-yr 462,561 613 320 306 307 276,587 Corals at Keppel Bay 100% 99-yr 509,998 366 366 316 50 118,069 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% 131,957 918 918 911 7 2,218 Seasons Residences Shanghai 100% 125,552 1,185 1,185 1,060 125 11,296 Sheshan Riviera 99.4% 90,109 217
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% 780,878 4,261 - - 4,261 453,768 Palm City 42% 492,471 3,043 1,587 1,581 1,462 145,289 Empire City HCMC 40% 6
Slide 47: Residential Launch Readiness – China
Residential Launch Readiness – China Units Ready to Launch Project Location 2H 2020 2021 2022 8 Park Avenue 7 - - Seasons Residences Shanghai 125 - - Sheshan Riviera 17 35 30 Hill Crest Villas - 42 36 Chengdu Serenity Villas 43 166 180 Waterfront Residences 24 29 28 Park Avenue Heights Wuxi 332 273
Slide 48: Residential Launch Readiness – Other Overseas
Residential Launch Readiness – Other Overseas Units Ready to Launch Project Location 2H 2020 2021 2022 Indonesia West Vista at Puri 60 294 300 The Riviera at Puri 28 23 - Jakarta BCA site - 300 151 Wisteria 201 176 - Vietnam Saigon Sports City Velona - 714 360 Natura - - 768 Riviera Point^ The View
Slide 49: Expected Completion for Launched Projects
Expected Completion for Launched Projects Units Launched as at Units Sold as at Units Remaining as at Expected Projects/Phases launched Location Total Units end-Jun 2020 end-Jun 2020 end-Jun 2020 Completion China Seasons Residences (Ph 3B) 346 346 333 13 1H2021 Seasons Garden (Plot 8) Tianjin 354 35
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 2020 2021 2022 China Sheshan Riviera Shanghai - 105 - Serenity Villas - - 180 Chengdu Hill Crest Villas - 53 45 Waterfront Residences - 56 - Park Avenue Heights Wuxi - 232 373 Seas
Slide 51: Commercial Projects - Under Development
Commercial Projects - Under Development Projects under Development Location Stake GFA (sm) Development Cost^ Completion Singapore Keppel Towers Singapore 100% 59,200 TBC TBC China Park Avenue Central Shanghai 99% 115,950 RMB3.8b 2023 Seasons City Tianjin 100% 162,000 RMB2.6b 2021 Indonesia IFC Jakar
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% 41,900 36,000 2002 Singapore I12 Katong 100% 26,200 19,600 2011* China Trinity Tower 30% 70,000 48,600 2015 North Bund Plaza 30% 74,400 64,000 2018 Shangha
Slide 53: Infrastructure
Infrastructure [<I Corporation 53 ff
Slide 54: Financial Highlights - Infrastructure
Financial Highlights - Infrastructure S$m 2Q 2020 2Q 2019 % Change 1H 2020 1H 2019 % Change Revenue 559 726 (23) 1,256 1,425 (12) EBITDA 78 41 90 258 67 285 Operating Profit 65 27 141 231 39 492 Profit Before Tax 91 51 78 273 71 285 Net Profit 78 43 81 252 59 327 54
Slide 55: Investments
Investments [<I Corporation 55
Slide 56: Financial Highlights - Investments
Financial Highlights - Investments S$m 2Q 2020 2Q 2019 % Change 1H 2020 1H 2019 % Change Revenue 287 306 (6) 576 449 28 EBITDA 70 72 (3) 108 223 (52) Operating Profit 22 24 (8) 12 159 (92) Profit/(Loss) Before Tax 39 (10) n.m.f. 7 71 (90) Net Profit/(Loss) 25 (24) n.m.f. (27) 25 n.m.f. n.m.f. denote
Slide 57: Asset Management Holdings
Asset Management Holdings Private Funds REITs & Trust Effective Attributable Effective Market Value interest NAV (S$m) interest^ (S$m)^ Alpha Asia Macro Fund 18.5%* 122.0* Keppel DC REIT 20.9% 868 Trends Fund III Alpha Data Centre Fund 65.3%* 21.4* Keppel 18.2% 491 Infrastructure Trust Keppel Asia I
Slide 58: Residential Land Sales at Tianjin Eco-City
Residential Land Sales at Tianjin Eco-City Selling Price Sales Value Land Area GFA Plot Date Plot Ratio Based on (RMB’m) (Hectare) (sm) Based on GFA Land Area (RMB/sm) (RMB’m/hectare) Plot 36 Apr 2020 1,174 10.86 1.6 167,400 108 7,013 Plot 30c Sep 2019 438 2.77 3.1 84,500 158 5,200 Plot 34 Aug 2019
Slide 59: M1 Operational Highlights
M1 Operational Highlights Revenue Customers 561 2,246 2,201 518 216 225 188 157 Equipment sales 407 578 18 ‘000 Fibre broadband S$m 16 International call 82 services Prepaid 87 Fixed services Postpaid 1,569 Mobile services 1,452 273 258 0 0 1H 2019 1H 2020 End-Jun 2019 End-Jun 2020 59
Slide 60: Vision 2030: New Reporting Segments
Vision 2030: New Reporting Segments 60
Slide 61: Vision 2030 Segments & Income Streams
Vision 2030 Segments & Income Streams Energy & Environment Urban Development Connectivity Asset Management • Repairs & conversions • Rental income from • M1 • Keppel Capital • Keppel O&M associates in investment properties • Data Centres (DCs) • Share of profit from KREIT, charter business • Hospita
Slide 62: 1H 2020 Performance by Segments
1H 2020 Performance by Segments S$m Energy & Environment Urban Development Connectivity Asset Management Revenue 2,024 511 587 60 EBITDA (557) 309 132 228 Operating (Loss)/Profit (633) 291 29 227 (Loss)/Profit Before Tax (942) 347 13 270 Net (Loss)/Profit (958) 215 – 258 The above financials exclude
Slide 63: 1H 2020 Income Streams by Segments
1H 2020 Income Streams by Segments S$m Energy & Environment Urban Development Connectivity Asset Management Recurring Income 19 (10) 28 82 EPC/Development for Sale (18) 73 – – Revaluation (14) 174 (1) (22) Profit from Capital Recycling – – 1 80 Others (incl. impairment) (945) (22) (28) 118 Net Profi
Slide 64: Forward-looking statements notice
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