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Keppel net profits slump after penalty

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LNG Industry,

Keppel Corporation Limited reported a net profit of S$217 million for the 12 months ended 31 December 2017. This was 72% lower than the S$784 million net profit for FY 2016, due mainly to the one-off financial penalty arising from Keppel Offshore & Marine (O&M)'s global resolution with criminal authorities in the US, Brazil, and Singapore, and related legal, accounting, and forensics costs amounting to S$619 million.

Excluding the one-off financial penalty and related costs, the group would have turned in a net profit S$836 million for FY 2017, 7% higher compared to S$784 million a year ago.

On a quarterly basis, the group registered a net loss of S$495 million in Q4 2017, compared to a net profit of S$143 million for Q4 2016. The net loss mainly arose from the one-off financial penalty and related costs as well as the weaker operating results of the Offshore & Marine Division, which were partially offset by higher profits from Singapore property trading, as well as fair value gains from assets recognised during the quarter.

Excluding the one-off global resolution and related costs of S$619 million, the group would have attained a net profit of S$124 million for Q4 2017, 13% below that of Q4 2016.

The group achieved revenue of S$5,964 million for FY 2017, which was S$803 million or 12% lower than that for 2016. In Q4 2017, group revenue of S$1.55 billion was 20% lower than the S$1.94 billion a year ago.

Mr Loh Chin Hua, CEO of Keppel Corporation, said, "The global resolution reached by Keppel O&M brings to an end what has been a painful chapter for Keppel. We have put in place effective compliance controls to ensure that this does not happen again. With the issue now behind us, we look forward to continuing on our growth trajectory and building a more disciplined and sustainable business - a Keppel that will remain trusted and admired by all our stakeholders."

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