Sustainable Living Takes Root
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APRIL 2011 eppel www.kepcorp.com/ekeppelite Keppel Group Newsletter Keppelite A solid start 4 Star delivery 20 Celebrating partnerships 31 Sustainable living takes root MICA (P) 072/01/2011 16 40 32 Contents SUSTAINING GROWTH Solid start for 2011 4 Distinctively Keppel 30 Focused on sustainable growth 6 Celebrating partnerships 31 Positioning for the future 8 Our cup of tea in Chengdu 32 Growth amidst volatility 10 Solid showcase 34 Data centres boost profits 11 Garden for retail therapy K-Green Trust makes steady progress Bay full of attractions 35 Keppel Land’s 1Q net profit soars 45.5% 12 EMPOWERING LIVES Developing mentors 36 Keppel T&T realigns China portfolio 14 Sea-bound Singaporeans 37 Marine contracts worth $240m secured 15 Keppelites Abroad SEAFOX 5 secures first wind farm charter 16 Wasting no opportunities 38 N-KOM drydocks its first LNG vessel 17 NURTURING COMMUNITIES Bonding kakis young & old 39 Maritime Week in full steam 18 Shanghai surprise Star delivery 20 Rallying for Mother Earth 40 Excellent execution 21 Relaying hope 42 SPECIAL FOCUS Painting smiles Breaking more grounds in Tianjin Eco-City 22 Keppel Volunteers Renewing ties with Sichuan 27 Holiday makeover 43 Taking a NEW look BACK PAGE Pioneering green data centres 28 Jasper orders second US$180m jackup 44 Keppel T&T welcomes SGX 29 Green logistics Cover image: (From right) Mr Teo Soon Hoe, Senior Executive Director and Group Finance Director of Keppel Corporation, Dr Lee Boon Yang, and Senior Minister Goh Chok Tong, viewing the Seasons City model at the groundbreaking ceremony in Tianjin Eco-City eppel Published for people in the Keppel Group by the Group Corporate Communications Division, Keppel Corporation Limited, 1 HarbourFront Ave, #18-01 Keppel Bay Tower, Singapore 098632. Printed by Image Printers Pte Ltd, Blk 1002, Redhill Industrial Estate, Jalan Bukit Merah, #03-12, Singapore 159456. Editorial Advisor Wang Look Fung Editor Ivana Chua Editorial Committee Ang Lai Lee, Casiopia Low, Catherine Tan, Chan Suan Sim, Cheryl Tang, Christie Lai, Chua Ying Ying, Diana Chan, Donald Sng, Eileen Tan, Elena Ong, Elizabeth Widjaja, Eva Ho, Frances Teh, Grace Chia, Leanne Sim, Lee Wan Jun, Lim Kah Ai, Lynette Goh, Maria Magdalena, Mohamed Yusof Mohamed, Ong Tze Haung, Roy Tan, Say Huan Yuan, Serena Toh, Teri Liew, Wong Chai Yueh, Woon Pek Yong, Vett Ramos, Yolanda Guo Keppelite I April 2011 CO REG NO: 196800351N Editorial The challenge of success 2010 has seen yet another record performance To optimise the Group’s inherent synergy and from the Keppel Group. Amidst an uneven global leverage our collective strength, we will continue recovery as well as unexpected disruptions in our to build and grow our sustainable development chosen industries, this significant achievement was business to offer holistic solutions for sustainable only possible with the Group’s unceasing focus on urban living. This will position us well to seize excellence and innovation. opportunities in developing countries as they urbanise. The sterling set of results caps a decade in which the Group chalked up a compound annual growth Tapping on our deep pool of experience and rate of more than 20%, with net profit growing expertise in the Group’s chosen industries, we will from $267 million in 2001 to $1.42 billion in 2010. identify adjacent businesses where we can grow The Group has also just reported a 7.8% growth and integrate along the value chain to further in net profit of $346 million in the first quarter enhance our competitive offerings. of 2011. Underpinning these thrusts would be our people, As the Group moves into a new decade, our track which are our core asset to drive the Group’s record will both inspire and challenge Keppelites. business into the next decade. With the Group’s How do we continue to create and deliver value operations spanning more than 30 countries, to our stakeholders? How do we position the Keppelites will need not only technical knowledge Group for sustained growth? Can we achieve and a keen nose for business, but also a good grasp continued growth doing more of the same or of local political and cultural sensitivities wherever should we pursue new but related businesses? they operate. We will continue to attract, retain Are we a Singapore company with overseas and develop talent so that we have the best people operations or a global company based in Singapore? in the right positions. What kind of Keppelites do we need to drive our business strategies? Over the past decade, we have built up our financial strength, developed proprietary knowledge and These questions stimulated robust discussions by designs and honed our execution skills. This is a members of the Keppel Corporation Board and firm foundation from which the Group will scale senior management from across the Keppel Group new heights. during an offsite strategy meeting in Chengdu in late March. With our commitment to excellence, drive and passion to succeed, Keppelites have what it takes Four strategic focus areas emerged from the two to make the next decade another era of growth. days of discussions. We will need to continue to innovate, improve and enhance our products and processes, as well as seek productivity gains from each employee, so that projects can be delivered better and more efficiently to our customers. Keppelite I April 2011 4 Sustaining Growth Growth Solid start for 2011 The Group achieved a net profit of $346 million in 1Q 2011, 7.8% higher than the corresponding period in 2010. Earnings Per Share were 21.5 cents and Annualised Return On Equity was 19.3%. Economic Value Added of $225 million was $12 million lower than 1Q 2010. REVENUE AND PROFITS Group revenue of $2,419 million was marginally below that of the comparative quarter in 2010 of $2,421 million. Revenue from the Offshore & Marine Division of $1,199 million was $294 million or 20% lower. The decline in revenue was due to lower volume of work. The Division completed Supported by strong utilisation and dayrates, the strong momentum in new orders bodes well for Keppel Offshore & Marine which has secured and delivered three rigs, a creditable $4.5 billion of new orders in 1Q 2011 two specialised vessels and two major upgrade/repair contracts. NET PROFIT BY SEGMENTS S$m 1Q 2011 % Restated* 1Q 2010 % % Change Revenue from the Infrastructure Division Offshore & Marine 216 62 205 64 5 increased by 4% to Infrastructure 40 12 31 10 29 $650 million. Higher Property 83 24 83 26 – revenue generated from the co-generation power plant Investments 7 2 2 – NM in Singapore was partly Total 346 100 321 100 8 offset by lower revenue from Engineering, Procurement * Restated due to retrospective application of INT FRS 115, which is effective 1 January 2011. and Construction (EPC) contracts in Qatar. increase was mainly due INT FRS 115 Agreements progressive recognition based to progressive revenue for Construction of Real on percentage of completion. The Property Division recognition from Reflections Estate on 1 January 2011, Consequently, revenue delivered an 87% at Keppel Bay and other the Group recognises revenue was fully recognised for a growth in revenue from residential projects in for its overseas trading development in Bangalore in $303 million to Singapore. Following projects on completion the current quarter as it was $568 million. The the Group’s adoption of of each project instead of completed in March 2011. Keppelite I April 2011 Sustaining Growth 5 Located in the Hunnan New District, the Shenyang township development will yield a total of 7,026 homes At the pre-tax level, Group in Singapore. Profit from dayrates for high-specification demand and growth due to profit of $494 million was Investments was slightly jackups, as well as increases property-cooling measures. 7% above that of the higher compared to the in exploration and production Nevertheless, these markets corresponding quarter in same quarter last year. budgets. The recent surge are expected to remain 2010. Despite a higher in orders has reversed the positive supported by stable operating profit, the Offshore After taking into account declining trend in orders of economic growth. We will & Marine Division reported a income tax expenses and the last two years. continue to time our project slightly lower pre-tax profit of non-controlling interests, launches to market demand. $266 million, a decrease of net profit attributable In the Infrastructure Division, $4 million from the previous to shareholders was the rising global focus on In Vietnam, we will capitalise year. This was mainly due to $346 million. The Offshore sustainable urbanisation will on rising demand for lower interest income and & Marine Division remained translate into demand for waterfront homes to launch contribution from associated the largest contributor to solutions in clean water, a township project in Ho Chi companies. net profit at 62%, followed waste management and Minh City later this year. by Property Division at energy generation. The Profit from the Infrastructure 24%, Infrastructure Division Group will draw useful On the commercial front, Division increased by 38% at 12% and Investments lessons from the ongoing Singapore’s Grade A and to $51 million. This was Division at 2%. challenges faced in our EPC prime office rents rose mainly attributable to projects in Qatar, and work on the back of growing better performance by to strengthen our execution business confidence. Our Keppel Energy, partly offset PROSPECTS capabilities in that segment. portfolio of prime office by lower contribution The Offshore & Marine buildings will benefit from from Keppel Integrated Division secured a creditable As the Group expects growth this improvement as we Engineering. $4.5 billion of new orders in in Asia to drive demand for continue to make selective the first quarter of 2011.