2Q & 1H 2020 Financial Results 30 July 2020
Scope of Briefing • Address by CEO • Group Financial Highlights by CFO 2
Address by CEO 3
Financial Performance Key h highl ghlight ghts • Excluding impairments in both Net (loss)/profit (S$537m) years, 1H 2020 net profit was S$393m, up 5% from S$375m 356 25 in 1H 2019 252 1H 2020 net loss compared to 1H 2019 net profit 59 of S$356m, after S$930m of impairments mostly 262 197 • Free cash outflow of S$278m in relation to the Offshore & Marine business 10 0 in 1H 2020 vs outflow of S$563m in 1H 2019 (959) • Net gearing was 1.00x as at S$m end-Jun 2020 vs 0.88x as at end-Mar 2020 (27) (537) • Interim cash dividend of 3.0cts/share declared for 1H 2020 1H 2019 1H 2020 Offshore & Marine Property Infrastructure Investments 4
Offshore & Marine • 1H 2020 net loss was S$959m, after S$890m in impairments for Net (loss)/profit contract assets, doubtful debts, stocks and investment, including share of Floatel’s impairment provisions 9 10 6 • EBITDA for 1H 2020 was positive at S$40m before impairments 3 0 (5) • Significant reduction in Singapore workforce due to COVID-19 measures, has impacted operations and topline (680) S$m • Workforce of ~24,000 as at March 2020 was down to ~1,200 in 2Q 2020 before increasing to ~5,000 presently (282) • Collaborating with authorities to ramp up activities safely with stringent measures in place (959) 1H 2019 1H 2020 • Segregation of workforce and staggered working hours and i New Builds Conversions & Repairs Associates off-days to minimise risk of re-infection i Includes contributions from Floatel, Blue Tern, Dyna-Mac, etc, and impairment on associates 5
Offshore & Marine Net orderbook i • 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 • YTD new contracts of S$107m from offshore wind and FPSO projects 2.4 S$b • Pivot to renewables, gas and other non-oil solutions paying off 2.1 0.1 • Continued enquiries for renewables and demand for conversion of 0.2 production assets 0.2 1.0 0.6 • Monitoring stranded assets and customers’ credit closely 0 End-2019 End-Jun 2020 Oil rigs FPSOs Specialised vessels Gas solutions Renewables i Excludes semis for Sete 6
Property • About S$3.9b in dividends received from Keppel Land since 2015, Net profit well above S$3.1b privatisation cost • Capital reallocated to fund other new initiatives such as asset 262 management and data centres 22 • 1H 2020 net profit of S$197m 197 112 24 • Lower yoy mainly due to lower divestment gains in 1H 2020 S$m • Partially offset by higher revaluation gains underpinned by resilient commercial portfolio comprising mainly office assets 143 128 30 0 1H 2019 1H 2020 Property trading Property investment REIT 7
Property • COVID-19 impact varies across key markets Home sales • Singapore – Home sales slowed while impact on office space remains muted 2,100 190 • China – Market continues to recover 50 110 • Vietnam – Market remains healthy but launch of new projects 610 1,230 pending approval of authorities 30 60 80 • Sale of 8,790 overseas units worth ~S$4.3b recognisable from Units 10 2H 2020-2024 1,140 1,050 • Residential landbank of ~45,000 units and commercial portfolio of 1.7 million sm GFA with about half under development 0 1H 2019 1H 2020 China Vietnam Singapore Indonesia India 8
Infrastructure Net profit • 1H 2020 net profit of S$252m, underpinned by • Improved core earnings across Energy Infrastructure, Environmental Infrastructure and Infrastructure Services 252 2 • Gain of S$131m from reclassification of Keppel Infrastructure Trust 44 • Unlocking value - S$47m in gains from sale of Keppel DC REIT units S$m 206 59 14 56 0 (11) 1H 2019 1H 2020 Keppel Infrastructure Data Centres Logistics & Others 9
Infrastructure Keppel I Infras astruc uctur ure • 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 C Centres • Work from home driving further demand for data centres • Government approval secured for new data centre to be jointly Tuas Nexus Integrated Waste developed with SPH at Genting Lane in Singapore Management Facility • Developing first greenfield data centre in China worth RMB1.5b Keppel-led consortium awarded S$1.5b through Alpha Data Centre Fund EPC contract for Singapore’s Integrated • Pursuing more efficient and sustainable data centre solutions Waste Management Facility with industry leaders 10
Investments • 1H 2020 net loss was S$27m mainly due to fair value loss Net (loss)/profit on investments 25 • Asset management 29 39 S$m 40 • Keppel Capital-managed funds received total commitments of 31 US$1.5b YTD from investors including pension and sovereign 37 47 wealth funds 0 (52) • Launched new Indonesian logistics property venture with Manulife and Mega Manunggal Property (11) (125) (19) • Investors value Keppel’s ability to provide proprietary deal flows and develop and operate real assets across the Group’s businesses (18) (27) • SSTEC sold a land plot for RMB1.17b contributing S$31m gain to Keppel 1H 2019 1H 2020 ii i Keppel Capital M1 KrisEnergy i Share of associated companies’ results i SSTEC Others Impairment of an ii Prior to Mar 2019, M1 relates to the share of associated companies’ results associated company 11
Investments M1 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 rebuilding M1’s technology stack • M1 to invest less than S$200m over 5 years in 5G rollout • M1 at forefront of 5G trials, continues collaboration with rest M1 is propelling Singapore’s digital of the Keppel Group and external parties economy with the rolling out of 5G network 12
We will continue to work as a Group to deliver value to our stakeholders, with a bold long- term vision, which transcends the impact of the current crisis. Keppel Marina East Desalination Plant
Group Financial Highlights by CFO 14
2Q 2020 Financial Performance Key highlights S$m 2Q 2020 2Q 2019 % Change Revenue 1,325 1,784 (26) Net P Prof ofit it from from ne net prof profit of of S$ S$153m ↑ to net l loss of S$697m EBITDA (322) 262 n.m.f. EPS PS from m 8.4cts ts t to negati tive ↑ 38.3 38.3cts Operating (Loss)/Profit (422) 160 n.m.f. (Loss)/Profit Before Tax (604) 206 n.m.f. Net (Loss)/Profit (697) 153 n.m.f. EPS (cents) (38.3) 8.4 n.m.f. n.m.f. denotes No Meaningful Figure 15
2Q 2020 Revenue by Segment S$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
2Q 2020 Pre-tax Profit by Segment S$m 2Q 2020 % 2Q 2019 % % Change Offshore & Marine (967) 4 2 n.m.f. 160 Property 233 161 78 45 (39) Infrastructure 91 (15) 51 25 78 Investments 39 (10) (5) n.m.f. (6) Total (604) 100 206 100 n.m.f. n.m.f. denotes No Meaningful Figure 17
2Q 2020 Net Profit by Segment S$m 2Q 2020 % 2Q 2019 % % Change Offshore & Marine (962) 4 3 n.m.f. 138 Property 162 (23) 130 85 25 Infrastructure 78 43 28 81 (11) Investments 25 (24) (16) n.m.f. (4) Total (697) 100 153 100 n.m.f. n.m.f. denotes No Meaningful Figure 18
2Q 2020 Impairments S$m 1Q 2020 2Q 2020 1Q 2019 2Q 2019 Doubtful debt on receivables in O&M Division - (179) - - Contract assets in O&M Division - (431) - - Stocks in O&M Division - (42) - - Investment in KrisEnergy (18) - (19) - Share of Floatel's impairment of vessels (1) (227) - - Fair value loss on investment in Floatel - (10) - - Others 8 (30) - - Total Impairments i (11) (919) (19) - i Impairments herein refers to provisions on contract assets, receivables, stocks, associated companies, fair value loss on investment in associated company, as well as share of impairment provisions from associated company 19
2Q 2020 Financial Performance (excluding impairments) Key highlights S$m 2Q 2020 2Q 2019 % Change ↑ Net P Prof ofit it from S S$15 $153m t to S$222 $222m Revenue 1,325 1,784 (26) EBITDA 370 262 41 ↑ EPS PS from 8.4 8.4cts t to 12.2 12.2cts Operating Profit 270 160 69 Profit Before Tax 315 206 53 Net Profit 222 153 45 EPS (cents) 12.2 8.4 45 20
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