Scope of Briefing Presentation.pdf · 2019. 7. 29. · 1 Jack Up / 4 Jack Up Upgrades / 337 Atwood / Diamond Offshore / Ensco / 1 Processing Platform Petrovietnam 2 Cable Ships

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1

FY 2002 Results Announcement28 January, 2003

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Scope of Briefing

Growth Strategy

Group Financial Highlights

Business Review and Outlook

2

Staying the coursein choppy waters

4

2002 Report Card

2002 full-year PATMI of S$356m on course

ROE exceeded 12% to reach 13.4%

Divested non-core assets and unprofitablebusinesses

Gearing declined to 1.00x

Total distribution for FY 2002 of 30 cents per share

EVA improved by S$370m

Strengthened Corporate Governance

… … We have delivered on our promises

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5

2003 Outlook & Growth Drivers

O&M

• O&M market continues to be positive, despiteuncertainty in some segments

• Continued growth in energy demand and risingE&P expenditures

• Replacement demand for ageing rig fleet

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Property

• Increasing demand for residential property due toregional economic growth (China, Thailand andVietnam)

• Governments’ support through fiscal policies

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7


Infrastructure

• Continued weakness in telecoms industry

• Rising usage of mobile communications will spurdemand for network engineering services

• Utilities Engineering to improve due to full yearcontribution from power barges and demand forenvironmental infrastructure in China

• Recent focus on clean environment presentsopportunities for us

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Strengthen Capabilities

• Offshore & Marine – Leverage Centre of Innovationand Excellence; created the Keppel Professorship todevelop O&M technology

• Property - Strengthen brand name as regionalresidential developer

• Utilities Engineering – Leverage Seghers KeppelTechnology Group (SKG) for proprietary technology,know-how and R&D capabilities

Focus on intellectual property development

Improve processes and controls

• Streamline engineering and production processes toimprove efficiency

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Corporate Governance

Independent Directors’ Meeting held, chaired by LeadIndependent Director

Completed 2nd round of Board and Individual DirectorAssessments

Completed assessment of the Chairman of the Board

Audit Committee met with external and internalauditors, without the presence of Management

Enterprise Risk Management (ERM) process reviewedby the Audit Committee

Received Award for Best Corporate Governance Reportand runner-up for SIAS Most Transparent CompanyAward for second consecutive year

We will continue todeliver… …

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Group Financial Highlights

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Financial Highlights

FY 2002 PATMI was S$356m, 33% higher thansame period last year

• Offshore and Marine contributed 51%

• Property contributed 24%

Achieved ROE of 13.4%

Current order book is about S$2.55b, comprising

• O&M: S$1.6b

• Infrastructure:

– Utilities Engineering: S$750m

– Network Engineering: S$200m

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Dividends

Maintained 30% - 35% dividend payout ratio

S44 tax credits of S$160m• Amount sufficient to pay 20 cents franked dividends

per annum up to 2007

Total distribution for FY2002 of 30 cents per share:• Interim dividend of 8 cents per share less tax

• Final dividend of 10 cents per share less tax

• Special dividend of 12 cents per share as capitaldistribution

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Earnings & EPS Growth(S$m) 2002 2001 % Change

Turnover 5,528 5,882 (6)EBITDA 649 823 (21)Operating Profit 463 626 (26)Profit Before Tax 511 666 (23)PATMI before EI 356 267* 33PATMI before EI (excl. deferred tax adjustment)

336 267* 26

EPS before EI (cents) 46.3 34.8 33

Strong EPS growth of 33%

* FY 2001 PATMI before EI was restated from S$273m to S$267m

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Shareholders’Funds/Gearing/ROE

(S$m) 31 Dec 2002 31 Dec 2001

Shareholders‘ Funds 2,718 2,585

Capital Employed 3,872 4,023

Net Debt 3,890 4,525 Net Gearing 1.00x 1.12x

ROE (before EI) 13.4% 10.1%

ROE exceeded 12%

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(S$m)2002 % 2001 % % Change

Offshore & Marine 276 43 149 30 85Infrastructure 60 9 100 20 (40)Property 184 28 163 33 13Sub Total 520 80 412 84 26Investments 129 20 80 16 61Total 649 100 492 100 32Keppel Capital 0 331 na

EBITDA by Segments

Core businesses continue to generatestrong cashflow

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Free Cash Flow

FY 2002(S$m)

Cash flow from operating activities Operating profit 463 Depreciation, amortisation & other items 180 Working capital changes, interest & tax paid (224)

Net cash from operating activities 721

Net cash from investing activities (273)

Dividend paid to shareholders of the company & subsidiaries

(164)

Free Cash Flow 284

Proceeds from sale of future residential receivables 302

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Net Cash Flow - Investing Activities

FY 2002(S$m)

(748)

Net cash from investing activities (273)

Acquisitions:

Keppel Hitachi Zosen, Keppel Verolme

Gas pipelines, rig

Keppel T&T, Echo Broadband

Seghers Keppel Technology

Operational capex, power barges mobilisation

Disposals

MobileOne

Capital Square

Bayswater, Aljunied Building, other Investments

475

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Debt/Equity Target

End 2002 Targeted Divestments End 2003

Capital Employed 3,900 - 3,900

Net Debt 3,900 (1,100) 2,800

D/E 1.00 - 0.72

(S$m)

Debt / equity target 0.6 to 0.8 on track

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(S$m)2002 % 2001 % % Change

Offshore & Marine 1,919 35 1,517 30 26Infrastructure 680 12 468 9 45Property 359 6 309 6 16Sub Total 2,958 54 2,294 45 29Investments 2,570 46 2,763 55 (7)Total 5,528 100 5,057 100 9Keppel Capital 0 825 na

Turnover by Segments

Core businesses turnover increased 29%

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Total SingaporeOverseas(S$m) (%)(%)

Offshore & Marine 1,919 694Infrastructure 680 4951Property 359 7327

Sub total 2,958 2476Investments 2,570 8614Total 5,528 5446

2002

76% of core businesses turnover came from overseas customers

Turnover by Customers

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(S$m)2002 % 2001 % % Change

Offshore & Marine 183 51 68 37 169Infrastructure 26 7 45 24 (42)Property 84 24 60 33 40Sub Total 293 82 173 94 69Investments 63 18 11 6 473Total* 356 100 184 100 93Keppel Capital 0 83 na

PATMI by Segments

Strong PATMI growth of 69% in corebusinesses

* FY 2002 PATMI before EI includes deferred tax adjustments of S$14m in Offshore & Marine,S$3m in Property and S$3m in Investments

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PATMI By Segments

PATMI before EI

9460

8160

2645

16968

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0

50

100

150

200

250

300

350

2001 2002

S$m

S$267m

S$356m33% growth

26% growth Offshore & MarineInfrastructure

PropertyInvestments

Deferred TaxReversal

* Includes Keppel Capital Holdings (KCH) contributions

*

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Divisional PATMI Contributions

2002 PATMI before EI

Offshore & Marine51%

Infrastructure7%

Property24%

Investments18%

Offshore & Marine25%

Infrastructure17%

Investments*36%

Property22%

2001 PATMI before EI

* Includes Keppel Capital Holdings (KCH) contributions

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PATMI & EPS (1999 – 2002)PATMI (S$m) EPS (Cents)

'99 '00 '01 '02'99 '00 '01 '02

220 237267

356

28.3 30.734.8

46.317.4%CAGR

17.8%CAGR

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EPS Growth Comparison

3-Year CAGR (2000 - 2002)

17.83%

12.40%

3.84%

4.66%

3.99%

-11.57%

-20% -10% 0% 10% 20%

Keppel's EPS

STI's EPS

S&P 500's EPS

Singapore NominalGDP

Total OECD NominalGDP

US Nominal GDP

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13.4

10.18.57.8

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1312

16

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

1999 2000 2001 2002

ROE

(%)

02468101214161820

DPS

(Cen

ts)

ROE Dividend

ROE & DPS (1999 – 2002)

Capital distribution 50c per share

PlusPlus

Capital distribution 12c per share

Business Reviewand Outlook

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(S$m)2002 2001 % Change

Turnover 1,919 1,517 26EBITDA 276 149 85Operating Profit 217 90 141Profit Before Tax 227 109 108PATMI before EI 183 68 169PATMI before EI(excl. deferred tax adjustments)

169 68 149

ROE 19.0% 8.0% 138

Financial Highlights – Offshore & Marine

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Offshore & Marine Review

Higher turnover and operating profit in 2002 from:• Higher level of jobs completion• Improved cost efficiency

Major contract completions in 4Q 2002 include:

• 1 FPSO conversion, 1 tension leg platform, 1 supportbarge, 1 cable ship, 1 supply vessel and 2 tugs

• 4 Jack-up upgrades and several Jack-up repairs

Contracts secured in 4Q 2002 include:• 1 swamp barge from repeat customer

• 1 Semi-submersible upgrade

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Offshore & Marine Review

Synergies from integration of offshore and marinedivisions• Achieved S$15m in cost savings in 2002, 50% higher

than original target• Synergies of S$20m target for 2003

Acquired Verolme shipyard in the Netherlands tofurther strengthen “near market, near customer”strategy servicing customers in the North Sea andWest African regionsMajor jobs in progress on schedule and withinbudget

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Offshore & Marine Orderbook

S$m Clients

For delivery in 20035 FPSO Conversions / Topsides 267 Halliburton / SBM / Vanguard

1 Semisubmersible / 1 Semisubmersible 380 Maersk / Diamond Offshore / Global SantaFeConversion / 1 Semisubmersible Upgrade

1 Jack Up / 4 Jack Up Upgrades / 337 Atwood / Diamond Offshore / Ensco /1 Processing Platform Petrovietnam

2 Cable Ships / 3 AHTS / 5 Tugs / 2 Swamp 332 Tycom / Delba Maritima / Hadi Hammam /Barges Pacific Richfield / Abu Dhabi Seaport /

Apexindo

For delivery in 20041 Jack Up / 2 AHTS 233 Perforadora / Delba Maritima

TOTAL 1.6b

1 Swamp Barge Repair / 1 Barge Conversion / 66 Apexindo / Van Oord / Dresser RandCompressor Modules

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Contracts currently being pursued include:

O&M Job Prospects

Products/Services Estimated Value (S$b)

Semi-submersibles(Newbuilding/Repairs/Conversions)

2.9

Jackups(Newbuilding/Repairs/Upgrading)

1.2

FPSO Conversions 0.2

Shipbuildings 0.8

Total 5.5

Platforms/TLPs/Dredgers, etc. 0.4

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Offshore & Marine Outlook

Offshore• Oil and gas prices expected to remain at levels

attractive for exploration and production activities

• Global E&P spending expected to increase in 2003,based on independent surveys

• Ageing rig fleet in need of replacements

• National oil companies in market for newjackups/semis

• Increased gas drilling in Gulf of Mexico expected toincrease the demand for premium jackups

• Potential jobs in the market expected to remain athealthy levels

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Offshore & Marine OutlookFPSO Conversions

• Demand expected to remain high as numerous deep waterproduction projects are likely to proceed

• Delay may be expected in the award of some contracts byowners

Shiprepairs

• Singapore, as a shipping hub, will continue to support avibrant shiprepair industry

• High end sophisticated repairs such as LNG/LPG continue todominate as low end repairs continue to face competition fromlow cost yards outside Singapore

Shipbuilding

• Market for Tugs and Offshore Supply Vessels expected to bestrong due to ageing fleet and inclination by oil companies tocharter newer vessels

• Enquiries for other specialised vessels remain active

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Offshore & Marine Strategy

Focus on R&D to gain competitive edge

• Connecting technology centres of excellence

• Selective acquisitions of technology

Continue to strengthen strategic network of yards

Focus on business/projects where KOM group hasor can develop competitive advantages

Further improve productivity, lower costs, andmaximise synergies from the integration of theshipyards

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($m) 2002 2001 % Change

Turnover 680 468 45EBITDA 60 100 (40)Operating Profit 21 80 (74)Profit Before Tax 29 93 (69)PATMI before EI 26 45 (42)ROE 5.9% 11.9% (50)

Financial Highlights – Infrastructure

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InfrastructureNetwork Engineering : Financial Highlights

($m) 2002 2001 % Change

Turnover 176 138 28EBITDA 1 15 (93)Operating Profit (4) 12 (133)Profit Before Tax (5) 19 (126)PATMI before EI (1) 7 (114)ROE (3.8%) 33.0% (112)

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InfrastructureNetwork Engineering : Review

Network Engineering market deteriorated significantly,especially in 2H 2002

Deployment of 3G worldwide further delayed

Restructured organisation to bring cost structure down tocompetitive level

Acquired the remaining 40% in ECHO Broadband

• Acquisition will provide greater operational flexibility in themobilisation of key resources

• Integration of ECHO Broadband and KeppelCommunications in progress

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InfrastructureNetwork Engineering : Outlook

Tentative signs of an improving telecoms market, butcautious outlook in the near term

• Even if global economy improves in 2003, there will be arecovery lag in telco capex

• 3G mass takeup not expected

Focus on organisational re-alignment, buildingpartnerships and alliances for market access, andenhancing value proposition to position for upturn

Order book of S$204m for delivery between 2003 and2004• Wireless S$194m• Wireline S$10m

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InfrastructureUtilities Engineering : Financial Highlights

($m) 2002 2001 % Change

Turnover 504 330 53EBITDA 59 85 (31)Operating Profit 25 68 (63)Profit Before Tax 34 74 (54)PATMI before EI 27 38 (29)ROE 6.9% 10.0% (31)

Higher FY 2001 PATMI due to the sale of toll roadbusiness in 1H 2001

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Utilities Engineering : Review

Power barges in Brazil commenced commercialoperation on a take-or-pay basis

Acquired Seghers Keppel Technology

• Cornerstone for Keppel to build a sustainableenvironmental engineering business

Major contracts secured in 4Q 2002 amountingto S$90m include:

• NTU FMO contract

• PUB water reclamation projects

Infrastructure

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Utilities Engineering : Outlook

Contribution from Environmental Engineering andFacilities Management expected to increase

Divesting peripheral businesses, eg. Setsco

Full year contribution from power barge project

Order book of S$745m

Infrastructure

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Financial Highlights - Property

NB: Property Segment includes all property related businesses of KCL

Significant improvement in operating profit due tohigher development profit

(S$m)2002 2001 % Change

Turnover 359 309 16EBITDA 184 163 13Operating Profit 166 142 17Profit Before Tax 166 127 31PATMI before EI 84 60 40PATMI before EI(excl. deferred tax adjustments)

81 60 35

ROE 7.3% 5.4% 35

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Property Review

Successful launch of One Park Avenue in Shanghai:• Blocks 1 to 4 (504 units) fully sold by November

2002

• Block 5 (97 units) released in January

• 98% of 5 blocks sold

Focused on regional residential propertydevelopment:• Acquired various sites in Beijing and Chengdu in

China as well as in Bangkok and Ho Chi Minh City forresidential development

Completed divestment of Capital Square

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Property Outlook

Overseas

Continue to focus on residential development projectsfor sale, especially in China, Thailand and Vietnam

• Demand for local housing in these countries remainsstrong, supported by sustained economic growth, risingincome levels and low interest rates

• Remaining blocks of One Park Avenue to be progressivelylaunched in 1H 2003

• Residential launches in Bangkok, Thailand and Ho ChiMinh City,Vietnam will follow in 2H 2003

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Property Outlook

Singapore

Possible residential launches / re-launches in 2003:

• The Tresor, The Linc, Cluny Hill bungalow plots, FreesiaWoods, Pinnacles @ Wee Nam, Avenue Park andCaribbean at Keppel Bay

Continue efforts to divest investment properties

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Financial Highlights - Investments

Significant improvement in profit due to betterperformance by SPC

(S$m)2002 2001 % Change

Turnover 2,570 2,763 (7)EBITDA 129 80 61Operating Profit 59 2 2,850Profit Before Tax 89 17 424PATMI before EI 63 11 473PATMI before EI(excl. deferred tax adjustments)

60 11 445

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Divestments

Divestments in FY2002:

70% interest in Capital Square

20.8% interest in M1 through IPO

20% interest in Keppel Insurance

Peripheral businesses

Proceeds(S$m)

SPC: Ongoing discussions with several parties

Working towards divestment of remaininginvestment properties and non-core assets

343287

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8

50

Jul2002

SepDec2002

Aug Oct Nov

19 Nov 2002

Seghers BetterTechnology

30 Dec 2002

CathodicProtectionTechnology

9 Dec 2002

Capital Square

19 Aug 2002

Verolme Botlek

17 Jul 2002

ECHO Broadband

Dec 2002

Partialinterest in M1

20 Dec 2002

KeppelInsurance

20 Jun 2002

Monetised S$355m ofresidential receivables

Balanced Portfolio Management

Acquisitions

Divestments

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Financial Targets

Continued growth in 2003 to achieve 15% - 20% CAGRearnings growth from 2001 through 2003

Higher contribution from Infrastructure and PropertyDivisions going forward

Maintain ROE of 12-15% in 2003 and beyond

Achieve net gearing of 0.6x - 0.8x by 2003

Maintain dividend payout ratio of 30-35%

Major divestments to continue

Continued EVA improvement

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Confident of achieving 2003earnings and ROE targets

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Keppel CorporationFY 2002 Results

Thank YouQ&A

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Additional Info

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Financial Highlights –Keppel Corp

(S$m) 9M 2002 4Q 2002 FY 2002

Turnover 3,975 1,553 5,528EBITDA 481 168 649Operating Profit 351 112 463 Profit Before Tax 384 127 511 PATMI before EI 263 93 356 EPS before EI (cents) 34.3 12.0 46.3

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(S$m) 1H 2002 2H 2002 FY 2002

Turnover 2,513 3,015 5,528EBITDA 325 324 649Operating Profit 239 224 463 Profit Before Tax 261 250 511 PATMI before EI 182 174 356 EPS before EI (cents) 23.8 22.5 46.3

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(S$m) 4Q 2002 4Q 2001 % Change

Turnover 1,553 1,487 4EBITDA 168 142 18Operating Profit 112 105 7Profit Before Tax 127 117 9PATMI before EI 93 89 4EPS before EI (cents) 12.0 11.5 4

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*Includes Keppel Capital Holdings (KCH) contributions

**Exceptional item of S$661m from the sale of KCH in 3Q 2001

(S$m) 2H 2002 2H 2001* % Change

Turnover 3,015 2,707 11EBITDA 324 306 6Operating Profit 224 214 5Profit Before Tax 250 240 4PATMI before EI** 174 128 36EPS before EI (cents) 22.5 16.6 36

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(S$m) 4Q 2002 4Q 2001 % Change

Turnover 541 627 (14)EBITDA 63 51 24Operating Profit 45 35 29Profit Before Tax 44 47 (6)PATMI before EI 44 36 22


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(S$m) 2H 2002 2H 2001 % Change

Turnover 1,057 908 16EBITDA 137 90 52Operating Profit 105 60 75Profit Before Tax 108 73 48PATMI before EI 87 50 74


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(S$m) 4Q 2002 4Q 2001 % Change

Turnover 205 128 60EBITDA 21 16 31Operating Profit 4 10 (60)Profit Before Tax 7 10 (30)PATMI before EI 12 7 71


62

(S$m) 2H 2002 2H 2001 % Change

Turnover 386 235 64EBITDA 31 27 15Operating Profit 5 16 (69)Profit Before Tax 8 18 (56)PATMI before EI 14 12 17


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63

(S$m) 4Q 2002 4Q 2001 % Change

Turnover 37 49 (24)EBITDA (8) 4 (300)Operating Profit (10) 3 (433)Profit Before Tax (12) 2 (700)PATMI before EI - (1) na


Network Engineering

64

(S$m) 2H 2002 2H 2001 % Change

Turnover 91 80 14EBITDA (10) 7 (243)Operating Profit (14) 5 (380)Profit Before Tax (17) 4 (525)PATMI before EI (4) 1 (500)


Network Engineering

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65

(S$m) 4Q 2002 4Q 2001 % Change

Turnover 168 79 113EBITDA 29 12 142Operating Profit 14 7 100Profit Before Tax 19 8 138PATMI before EI 12 8 50


Utilities Engineering

66

(S$m) 2H 2002 2H 2001 % Change



Utilities Engineering

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67

(S$m) 4Q 2002 4Q 2001 % Change

Turnover 112 85 32EBITDA 56 50 12Operating Profit 52 47 11Profit Before Tax 51 48 6PATMI before EI 19 25 (24)



68

(S$m) 2H 2002 2H 2001 % Change




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(S$m) 4Q 2002 4Q 2001 % Change

Turnover 695 647 7EBITDA 28 25 12Operating Profit 11 13 (15)Profit Before Tax 25 12 108PATMI before EI 18 21 (14)


70

(S$m) 2H 2002 2H 2001 % Change

Turnover 1,358 1, 323 3EBITDA 49 31 58Operating Profit 14 (6) naProfit Before Tax 32 6 433PATMI before EI 24 16 50


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Core Businesses’ PATMI Growth

* Excludes deferred tax adjustments of S$14m in Offshore & Marine and S$3m in Property

0

50

100

150

200

250

300

Offshore & Marine 68 169Infrastructure 45 26Property 60 81Total 173 276

2001 2002

PATMI before EI*S$m

60%growth

173

276

*

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PATMI & EPS (1999 – 2002)

1H 2H

PATMI (S$m) EPS (Cents)

11.1 13.9

17.216.8

10.77.3

13.1

10.9

10.5

5.1

12.0

11.5

'99 '00 '01 '02

86 108

134129

8256

10083

81

39

93

89

'99 '00 '01 '02

220 237267

356

28.3 30.734.8

46.3

1Q:

2Q:

3Q:

4Q:

4Q:

3Q:

2Q:

1Q: 1Q:

2Q:

3Q:

4Q:

4Q:

3Q:

2Q:

1Q:

17.4%CAGR

17.8%CAGR

Documents

Scope of Briefing Presentation.pdf · 2019. 7. 29. · 1 Jack Up / 4 Jack Up Upgrades / 337 Atwood / Diamond Offshore / Ensco / 1 Processing Platform Petrovietnam 2 Cable Ships