2Q & 1H 2019 Financial Results 18 July 2019
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 Committee during the year. As the financial reporting framework applied by the Group is equivalent to International Financial Reporting Standards, the agenda decision has relevant impact to the Group’s Property Division. Consequently, 2018 financial figures in this presentation have been restated. 2
Address by CEO 3
Financial Performance Key h highlig lights Net profit • Annualised ROE was 6.3% 586 S$356 56m • Free cash outflow of S$614m in 66 1H 2019 vs inflow of S$873m in 1H 2018 1H 2019 net profit down 39% yoy as 1H 2018 benefitted from en-bloc sales worth S$416m 356 S$m • Net gearing was 0.82x as at 25 606 end-Jun 2019 vs 0.72x as at 59 8 8 cts ts/sh share end-Mar 2019 262 10 0 Declared interim dividend for 1H 2019 (40) (46) 1H 2018 1H 2019 Offshore & Marine Property Infrastructure Investments 4
Multiple Income Streams Net profit by income type Recurring income breakdown 586 S$145m 57 12% S$114m 114 356 13% 5% 18% 34% 207 40% Focused on improving earnings S$m 487 21% 145 10% quality and growing recurring income as a stable contributor to the Group 41% 30% 135 0 0 -14% (72) -10% (131) 1H 2018 1H 2019 1H 2018 1H 2019 REITs & trust Asset management Project-based Recurring Infrastructure Rental & charter i RIDs Investment & others Connectivity Hospitality i Revaluations, major impairments & divestments 5
Offshore & Marine Offshore wind farm substations for Ørsted's Greater Changhua projects in Taiwan
Offshore & Marine Key highlights Net profit • Secured quality contracts S$4m amounting to S$1.9b YTD, 10 exceeding S$1.7b won in 2018 S$m 9 • Latest contracts include: 2Q 2019 net profit compared to 2Q 2018 net loss 5 6 0 of S$17m (5) • About S$720m worth of offshore wind projects for (34) Germany and Taiwan from S$10m TenneT and Ørsted respectively • About S$130m for a 3rd (11) 1H 2019 net profit compared to 1H 2018 net loss dredger from Van Oord and of S$40m (40) an FPSO from Yinson 1H 2018 1H 2019 i New Builds Repairs & Conversions Associates i Includes contributions from Floatel, Blue Tern, Dyna-Mac, etc. 7
Offshore & Marine Net orderbook i • Net orderbook of S$5.5b is the highest since 2016 5.5 • Focused on execution 1.0 4.3 • Delivered two FPSOs, two 0.3 0.8 jackups and three dredgers 0.9 in 1H 2019 2.4 S$b 2.1 • Struck steel for Gimi FLNG Keppel O&M delivered Liza Destiny, 1.0 0.5 Guyana’s first FPSO 0.5 0.3 0 End-2018 End-Jun 2019 Newbuild jackups Newbuild semis FPSOs/FLNGs Specialised vessels ii Others i Excludes semis for Sete ii Includes modification, upgrading, fabrication & rig repairs 8
Property Phase II launch of the Nanjing project was 10 times over-subscribed
Property Key highlights Net profit • Entered into conditional share S$262m purchase agreement with Phu Long for 60% stake in 606 31 three residential sites in Ho Chi 1H 2019 net profit down 57% yoy as 1H 2018 Minh City 47 benefitted from en-bloc sales worth S$416m S$m 262 537 22 129 121 0 (9) (10) 1H 2018 1H 2019 Property trading Property investment Hotels/Resorts REIT 10
Property Home sales • Sold 2,100 units in 1H 2019, up 52% yoy, with total sales value of ~S$1.2b 2,100 • 1,140 units sold in China, 190 mainly from Nanjing and 50 Wuxi projects 110 1,385 • 610 units sold in Vietnam, 610 Units 225 mainly from Palm City and 150 Total residential landbank Riviera Point 130 comprised about 46,000 units 80 as at end-Jun 2019 • Sale of 8,690 overseas units 1,140 800 worth ~S$2.9b recognisable from 2H 2019-2022 1H 2018 1H 2019 • ~15,000 units launch-ready China Vietnam Singapore Indonesia India from 2H 2019-2021 11
Infrastructure Keppel Marina East Desalination Plant is on track for completion in 2020
Infrastructure Key highlights Net Profit • Keppel Infrastructure delivered strong S$59m earnings growth on improved 66 performance across all its businesses 59 14 • KMEDP i ramping up to 29 1H 2019 net profit down 11% yoy as 1H 2018 included dilution gain from Keppel DC REIT’s commence testing and private placement commissioning in 3Q 2019 S$m 56 • HKIWMF ii in advanced stage 48 of design and engineering 0 • Keppel Electric secured over (11) (11) 150,000 household customers 1H 2018 1H 2019 in Singapore Keppel Infrastructure Data Centres Logistics & Others • Keppel Data Centres invested EUR 14m in edge data centre i Keppel Marina East Desalination Plant developer and operator, Etix Group ii Hong Kong Integrated Waste Management Facility 13
Investments Keppel REIT acquired freehold CBD Grade A office building, T Tower, in Seoul
Investments Key highlights Net Profit • New acquisitions drove stronger 1H 2019 earnings for S$25m 25 Keppel Capital 39 • Keppel REIT completed 1H 2019 net profit mainly due to improved S$m acquisition of T Tower in Seoul earnings from Keppel Capital, higher contribution 31 from M1 and re-measurement gain of previously 11 held interest in M1 37 • Alpha continued to actively pursue 11 0 acquisitions and divestments (52) (56) amounting to over US$2b (11) (11) (1) • Keppel Capital participates as (19) (46) strategic partner in Prime US REIT’s proposed listing 1H 2018 1H 2019 ii i Share of associated companies’ results Keppel Capital M1 KrisEnergy i i SSTEC Others Impairment of an ii Prior to March 2019, M1 relates to the share of associated company associated companies’ results 15
Driving M1’s Transformation FOCUS AREAS BUSINESS UPDATES One ne P Pla lan Accelerating core consumer growth >15,000 new customers secured in first month following launch of simplified plan and improved customer experience Expanding B2B segment Improving cost efficiencies Partnering IMDA and PSA to testbed 5G technologies for smart port operations, which can also be applied to other sectors Pursuing regional opportunities Colla labor boration ion Harnessing synergies Working with Keppel O&M to provide connectivity for autonomous vessels 16
Investing in Innovation We have invested close to S$100m in venture capital, businesses and startups focused on new technologies and innovations in the year to date. DIRECT INVESTMENTS FUND INVESTMENTS Property China Tech Enterprise & Edge Data Electric Vehicle Technology Startups Deep Tech Centre Solutions Batteries Etix Group Fifth Wall Ventures Vertex Ventures Wavemaker Envision AESC Partners Group 17
Group Financial Highlights by CFO 18
2Q 2019 Financial Performance Key highlights S$m 2Q 2019 2Q 2018 % Change Revenue 1,784 1,523 17 Net P Profi fit 39% f fro rom ne net pr profit of of ↑ S$24 249m 9m t to S$153m $153m EBITDA 262 324 (19) EPS PS 39% f 39% from 13. 13.7cts t to ↑ 8.4cts ts Operating Profit 160 280 (43) Profit Before Tax 206 298 (31) Net Profit 153 249 (39) EPS (cents) 8.4 13.7 (39) 19
2Q 2019 Revenue by Segment S$m 2Q 2019 % 2Q 2018 % % Change Offshore & Marine 481 27 607 40 (21) Property 271 15 244 16 11 Infrastructure 726 41 647 42 12 Investments 306 17 25 2 >500 Total 1,784 100 1,523 100 17 20
2Q 2019 Pre-tax Profit by Segment S$m 2Q 2019 % 2Q 2018 % % Change Offshore & Marine 4 2 (11) (4) n.m. Property 161 78 260 87 (38) Infrastructure 51 25 44 15 16 Investments 6 3 5 2 20 Less: Charges related to the (16) (8) - - n.m. acquisition of M1* Total 206 100 298 100 (31) * Charges included amortisation of intangibles, funding costs and professional fees 21
2Q 2019 Net Profit by Segment S$m 2Q 2019 % 2Q 2018 % % Change Offshore & Marine 4 3 (17) (7) n.m. Property 130 85 228 92 (43) Infrastructure 43 28 40 16 8 Investments (11) (7) (2) (1) 450 Less: Charges related to the (13) (9) - - n.m. acquisition of M1* Total 153 100 249 100 (39) * Charges included amortisation of intangibles, funding costs and professional fees 22
1H 2019 Financial Performance Key h highlig lights S$m 1H 2019 1H 2018 % Change Net Profit 39% to S$356m ↑ Revenue 3,315 2,993 11 ROE from 10.0% to 6.3% ↑ EBITDA 651 856 (24) (Annualised) Operating Profit 482 766 (37) Free Cash from inflow of S$873m ↑ Flow to outflow of S$614m Profit Before Tax 489 746 (34) ↑ Net Profit 356 586 (39) Net Gearing from 0.48x to 0.82x EPS (cents) 19.6 32.3 (39) Interim from 10.0cts to 8.0cts ↑ dividend 23
1H 2019 Revenue by Segment S$m 1H 2019 % 1H 2018 % % Change Offshore & Marine 813 24 939 31 (13) Property 628 19 787 26 (20) Infrastructure 1,425 43 1,211 41 18 Investments 449 14 56 2 >500 Total 3,315 100 2,993 100 11 24
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