2006 Another Exceptional Year for Keppel

FEBRUARY 2007 eppel www.kepcorp.com/ekeppelite Keppel Group Newsletter Keppelite Strong interest for Reflections at Keppel Bay 18 Crafting hallmarks of excellence 22 Ordinary people, extraordinary adventures 41 2006 another exceptional year for Keppel MICA(P) NO. 045/11/2006 Keppelite I February 2007 14 31 44 Contents BUSINESS 2006 marks another exceptional year 4 On par with the world’s best 33 Building momentum to enhance track record 7 Zero accident on P-53 34 Positioned to grow beyond 10 Al-Zubarah off to a safe start Fortifying our businesses 13 On course for quality 35 Keppel Land’s PATMI reaches $200m 14 TEAM Getting the image of shipping ship-shape 36 Capitalising on regional growth 16 Nelson Yeo to head Keppel Philippines Marine 37 Keppel T&T acquires datacenter business in Europe 17 Initiatives to attract talent bear fruit 38 Keppel Bay draws strong buyer interest 18 Ties that bind 39 SPC rewards shareholders 21 Through the eyes of an intern 40 Crafting hallmarks of excellence 22 Ordinary people, extraordinary adventures 41 Special Focus Peak performance 24 PEOPLE Grooming leaders across borders 42 MBFC consortium exercises option 27 Keppelites Abroad SPC moves into Australia China crossing 45 Laying strong foundations 28 COMMUNITY Shaping the future 44 Transparency puts Keppel on the MAP Home away from home 46 WTE contract in the Netherlands 29 Rolling good times Repeat customers for Keppel FMO 30 Keppel Volunteers FELS Cranes wins two contracts Lessons in peace 47 On track to deliver second Prosafe FPSO 31 BACK PAGE Another order for a KFELS N Class jackup rig 48 19 consecutive years of profit for AHI 32 Divestment of associated company 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 Grace Chia Editorial Committee Andrea Lee, Andrew Ong, Ang Lai Lee, Clara Ko, Diana Chan, Fatima Lay, Felicia Lee, Hong Tin Wei, Ivana Chua, Kelvin Ng, Lai Siang Chin, Lee Yin Chiin, Low Hooi Hoon, Mohd Nor Nordin, Nicole Ma, Nicole Tan, Pamela Almeda, Phang Weng Onn, Quek Mong Song, Romell Song, Roy Tan, Sarah Seah, Serena Toh, Teri Liew, Teo Chang Ching, Woon Pek Yong Keppelite I February 2007 CO REG NO: 196800351N Editorial Succeeding on success The numbers pose a steep challenge: 33% growth echoed in Asia’s growing economies. Demand for in net profit, 32% increase in earnings per share, oil and gas as well as environmental solutions grow an almost-doubled Economic Value Added and a unabated. This should give us some confidence high return on equity. but our eyes must be fixed on deepening our strengths in our areas of expertise as we relentlessly It was, by all counts, an exceptional year. Indeed, continue to look and scour beyond our previous we have surpassed our own targets in 2006 and groundwork. have reason to be glad. We have an even higher number of offshore and But as in any competitive arena, the single most marine deliveries to complete even as we reap the important question faced by a true athlete wanting benefits of strong partnership with our customers. to stay the best is, “How can I better this in the There is the rollout of residential property launches next race?” For truth, the champion is really up in Singapore as well as townships across Asia. We against himself. will also leverage our track record in environmental engineering as we look to capturing new markets. So it is with Keppel. Our investments will continue to be managed to extract maximum value. We did 26 deliveries for the offshore and marine industry at a time when on time and on budget Above all, we will strive towards technology completions are more important than ever. leadership and efficient work processes as they are essential to distance ourselves from the Our properties in Singapore and overseas have competition and enhancing value. been launched to strong demand, even as we continue to unlock value in our office portfolio. As proud Keppelites, we will cheer each another on in succeeding on success. We will need more We deepened our foothold in the Middle East with than the strengths that have so far accompanied the Qatar infrastructure project and achieved our our growth to sustain our push towards realising milestones for the NEWater and cogen plants that the embedded growth drivers in our businesses. will be soon be up and running in Singapore. As we remain focused on value creation, we must Making 2007 even better than 2006 will present not be deluded by success. an exciting challenge for Keppelites. The economic outlook for Singapore appears good with favourable growth forecast. The exuberance is Keppelite I February 2007 4 Business 2006 marks another exceptional year Keppel Corporation achieved Revenue of $5,755m from GROUP another record year as Group the Offshore & Marine attributable profit rose to an Division was $1,643m or (S$’m) 2006 2005 % Change all-time high of $751m in 40% higher than 2005. The Turnover 7,600.9 5,688.4 33.6 2006. This was $187m or revenue from this Division 33% higher from the $564m accounted for 76% of the Operating Profit 804.1 466.7 72.3 achieved in 2005. Group’s total revenue Profit before tax & EI 1,139.8 826.2 38.0 for 2006. The Division The year also saw new delivered 26 newbuilds and PATMI before EI 750.8 563.7 33.2 benchmarks set for all of its conversions, all of which was EPS before EI (cents) 95.4 72.1 32.3 key performance indicators. completed on-time or ahead of time and within budget. EI – Exceptional Items Earnings per share of Revenue from ship and rig 95.4 cents were 32% above repairs was also strong. also better due to the tight profitable fixed price the previous year. Return on supply of prime office contracts were not renewed. equity scaled a new high of The Property Division buildings in the Singapore 19.1% and economic value achieved revenue of Central Business District Meanwhile, Group profit added of $423m more than $1,155m in 2006, $308m (CBD). before tax exceeded the $1b doubled that of 2005. or 36% higher than the mark for the first time to year before. The increased Keppel Telecommunications $1,139m, a 38% increase Group revenue of $7,601m revenue was underpinned by & Transportation (Keppel from the previous year. was $1,913m or 34% higher improved sales and prices of T&T) reported lower earnings than that of the previous the Division’s new and as no new major network The Offshore & Marine year. This is a new record existing trading projects both engineering contract was Division, which had an surpassing the previous high in Singapore and regionally. secured during the year. exceptionally busy year of $6,218m achieved in the Rental income from Revenue from electricity contributed significantly to financial year 2000. investment properties was trading also declined, as non- the Group’s earnings growth. The Offshore & Marine Division wrapped up 2006 with timely deliveries of 26 newbuild and conversion projects Keppelite I February 2007 Business 5 The Division’s profit before tax of $624m for 2006 was $273m or 78% higher than last year’s. Revenue and operating margins also improved with higher contract prices and more efficient project execution. The Property Division posted earnings of $233m, 5% above the previous year due to the higher revenue from trading projects, profits from the sale of a piece of land in Tianjin and an equity interest in a property project. The redeployment of the power barges in Ecuador saw Riding on positive demand for premier waterfront residences, Keppel will launch Reflections at Keppel Bay in March/April 2007 the Infrastructure Division return to profitability in the fourth quarter of 2006. Group taxation expenses The Offshore & Marine International Monetary However, the quarter’s increased in 2006 due to Division secured a record Fund’s forecast of 5% for profit was not sufficient to higher profits from overseas $7.3b of new orders in 2006, GDP global growth in 2007. reverse the losses incurred in operations. bringing the net orderbook Asian economic growth the first nine months of the at end-2006 to $10.5b. The is expected to continue. year. After taking into account outlook for the drilling Regional demand for refined the higher taxation charge industry remains good, with petroleum products is also Earnings from Investments and minority share of profit, tight availability and strong likely to remain robust. were higher with gains from the attributable profit to demand expected for most Coupled with the projected the sale of investments and shareholders was $751m. types of rigs and other tight refining capacity, better contributions from related product segments. refining margins are k1 Ventures, which benefited MODEST EARNINGS expected to be healthy. from the divestment of The GROWTH IN 2007 There is also a growing need Gas Company, LLC. These For the current year, the for more deepwater The prices of private were more than sufficient Group expects continued equipment and floating residential homes in to offset the lower growth in its Offshore & production solutions as Singapore rose by an contributions from Singapore Marine and Property exploration and production estimated 10% in 2006, the Petroleum Company (SPC), Divisions. The Infrastructure activities move into deeper fastest growth rate since which was affected by lower Division is also expected to waters.

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