keppel corporation - results announcement final...amfels (1 yard) brazil fels setal/ brasfels (2...
TRANSCRIPT
1
FY 2001 Results Announcement
30 January, 2002
2
Agenda
Financial Highlights & SegmentalResults
Strategic Direction
Q&A
1. Financial Highlights &Segmental Results
4
Financial Highlights
Attributable profit (before exceptionals) of
S$273m; a 15% increase from 2000
ā¢ Ex-Keppel Capital, profit grew by 50%
Attributable profit (including exceptionals) grew
by 171%, enhanced by exceptional gain on sale
of Keppel Capital stake
Divestment of S$2.2b of assets in 2001
5
Financial Highlights (Contād)
Total payout to shareholders in 2001:
ā¢ Capital distribution: S$0.50 per share
ā¢ Dividends: S$0.16 per share
Privatisations
ā¢ KFEI - completed in Nov 2001
ā¢ KHZ and KTT - both announced in Dec 2001
Early redemption of RCCPS of US$421m in Dec2001
6
Financial Summary
(S$m) 2001 2000 Change
Turnover 5,882 6,218 (5%)
EBITDA 831 870 (4%)
Pre-Tax Profit (pre-EI) 665 709 (6%)
PATMI (pre-EI) 273 237 15%
PATMI (post EI) 385 142 171%
EPS (pre-EI) $0.36 $0.31 16%
Dividend / share $0.16 $0.13 23%
EI - Exceptional Items
7
237273
(50)
0
50
100
150
200
250
300S$m
Offshore & Marine 32 71
Infrastructure 15 45
Property 84 61
Investments (4) 13
Banking 111 84
Total 237 273
2000 2001
A Group in Transformation ā¦
15% growth
PATMI (Pre-Exceptionals)
S$m
8
Financial Summary (Contād)
(S$m) 2001 2000 Change
Turnover 5,058 4,885 4%
EBITDA 497 430 15%
Pre-Tax Profit (pre-EI) 345 279 24%
PATMI (pre-EI) 189 126 50%
Ex-Keppel Capital
EI - Exceptional Items
9
Growth of non-financialservices groups
126
189
(50)
0
50
100
150
200
S$m
Offshore & Marine 32 71
Infrastructure 15 45
Property 84 61
Investments (4) 13
Total 126 189
2000 2001
50% growth
PATMI (Pre-Exceptionals)
S$m
10
Financial Summary (Contād)
Net Debt 4,525 5,034
Shareholdersā Funds 2,658 2,749
Capital Employed 4,114 7,007
ROE(1) 10.1% 8.5%
ROE(1) (ex-Keppel Land) 13.5% 10.6%
Net Gearing 1.1x 1.0x
(1) Pre-exceptional items
(S$m) 2001 2000
11
Offshore 734 344 79 58 71 54
Marine 784 418 69 33 37 8
Network Engineering 220 156 25 21 20 18
Utilities 248 120 85 20 74 13
Property 309 585 166 217 126 180
Investments 2,763 3,262 82 95 17 6
Keppel Capital 824 1,333 334 439 320 430
Total 5,882 6,218 840 883 665 709
Segment Results by Business
Turnover
2001 2000
EBITDA(1)
2001 2000
PBT(1)
2001 2000
S$m
(1) Pre-exceptional items
12
Segment Results by Business(Contād)
Offshore & Marine 22%
Infrastructure11%
Property65%
Investments2% Offshore &
Marine 31%
Infrastructure27%
Property37%
Investments5%
2000 2001
PBT
13
2001 Exceptional Items
S$m
Gain from sale of Keppel Capital 741
Less: Write-down on land bank (244)
Less: Write-down on Keppel T&T (110)
Less: Write-down on KFEI (115)
Less: Write-down on Keppel Corp investments (92)
Less: Imputed interest and exchangeadjustment on RCCPS (68) Net Exceptional Gain 112
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Dividend Policy
Historical payout ratio of about 30-35%
In 2001, Keppel also returned S$0.50/share toshareholders via a capital distribution exercise(S$383m)
10.08.0
12.0 13.0
16.0
1997 1998 1999 2000 2001
32.9
35.4
31.031.7
33.9
1997 1998 1999 2000 2001
Payout Ratio (%)(1)
(1) Dividends as a percentage of pre-exceptional net income
Gross Dividends Announced (cents)
15
Divestments in 2001
ā¢ 37% stake in Keppel Capital S$1,850mā¢ Stake in toll road & KE Steam in China 101mā¢ 1% stake in OUB 100mā¢ Real estate (of KFEI, KTT) assets 50mā¢ 5.1% stake in Australand 38mā¢ 3 ships owned by KTT 30mā¢ Bayswater 22mā¢ Aljunied Building 12mā¢ Nana Tai Mansion 6mā¢ 50% stake in Apac BizInfo & Call Centre 5m
Total: S$ 2.2b
At least 1 major divestment in 2002
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Major Uses of DivestmentProceeds in 2001
S$m
Capital distribution 383
Redemption of RCCPS 775
Privatisation of KFEI 402
Total: S$1,560
S$2.2b generated from divestments used for:
17
Strong Cash Flow in 2002
Planned capex to be funded with internallygenerated cash flows
Divestments will generate further cash flow
Expected uses of funds
ā¢ Privatisation of KHZ & KTT
ā¢ Power & desalination plants
2. Strategic Direction
19
Strategic Milestones
Jul 2001 Aug Sep Oct Nov Dec Jan 2002 Feb Mar Apr
24 Jul 2001
KCLshareholdersgranted KCL
directors generalmandate to
dispose KCHshares
7 Aug 2001
KCLannouncedproposal to
privatize KFEI
16 Aug 2001
Completion ofsale of KCH to
OCBC
5 Oct 2001
EGM to approveprivatization of
KFEI
2 Nov 2001
Completion ofprivatization of KFEI
3 Dec 2001
KCL announcedproposals to
privatize KHZ andKTT
7 Feb 2002
EGM to approveprivatization of KHZ
12 Mar 2002
Scheduled date forcompletion of
privatization of KHZ
Late March /Early April
EGM to approveprivatization of
KTT
20
Strategic Objectives
Focus on core competencies
Deliver sustainable earnings growth
Enhance shareholder value
21
Financial Targets
15% - 20% CAGR earnings growth through2003
ROE of 12 - 15% by end 2003
EVA improvement year-on-year
Debt / Equity Ratio of 0.6x - 0.8x by end 2003
22
Group Outlook for 2002
23
Offshore & Marine
Strong Orderbook:-ā¢ Offshore orderbook includes
ā Newbuildings of 4 jack-up rigs, 1 tension leg platformand 1 semi-submersible for delivery between 2002 and2004.
ā 2 conversions / upgradesā 13 upgrades / repairs
ā¢ Marine orderbook (excluding shiprepairs)includesā 12 newbuildings for delivery between 2002 and 2003ā 2 FPSO conversions
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Offshore & Marine (Contād)
Outlook:ā¢ Rig utilisation is strong in W. Africa & Asia Pacific, steady in
Middle East / Mediterranean, flat in N. Sea and Latin America,and weak in US Gulf
ā¢ FPSO / FSO conversion market remains strong, bolstered byactive offshore production
ā¢ Shiprepair activity expected to remain at current level
Privatisation of KHZā¢ Synergies of S$10m expected from revenue uplift and cost
savings in 2002; more expected in subsequent years
Texas AMFELS(1 yard)
BrazilFELS Setal/BrasFELS(2 yards)
Bulgaria
Norway (1 yard)
CaspianSea
UAE(1 yard)
SingaporeKFELS
(2 yards)KS
(2 yards)KSD
(2 yards)
Philippines(3 yards)
China Engineering
Office
Keppel O&M yards
Other facilities
HoustonCenter
Offshore & Marine: Global Reach
26
Offshore & Marine (Contād)
Growth Strategy:ā¢ Entrench Keppel as a global leader in the O&M
business
ā¢ Develop new product designs to meet new marketdemand
ā¢ Adopt emerging drilling/production technologies
ā¢ Acquire yards in strategic locations to further ānearmarket, near customerā strategy
ā¢ Migrate up the value chain:ā Grow intellectual capital
27
Infrastructure:Network Engineering
Healthy order book (2002/03):ā¢ Wireless: S$ 213mā¢ Cable/Broadband: S$ 379m
Revenue in 2002 expected to reach S$500m,more than double that in 2001
Earnings in 2002 will improve significantly
28
Infrastructure:Network Engineering
Outlook:
ā¢ Increasing market share in Europe through EchoBroadband with the upgrading of cable TV networksin Germany, France, Spain & The Netherlands
ā¢ Continued rollout of wireless infrastructure for telcosin S. E. Asia, where we are a leading integrationsolution partner
29
Infrastructure:Network Engineering
Global Reach
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Infrastructure:Network Engineering (Contād)Growth Strategy:ā¢ Capitalise on high growth prospects:
ā Outsourcing trend continuesā Network upgrading cycle in Asia and Europe
ā¢ Focus on growing intellectual capital
ā Own proprietary cable / broadband design planning tools
ā Acquire proprietary application technology to service Telcos
ā¢ Leverage relationships with strategic partners
ā Already the preferred partner of top equipment vendors
31
Outlook:ā¢ Enhance yield on current asset portfolio:
ā 190MW power barge project in Brazil
ā 60MW power plant in Nicaragua
ā 100MW Zunhua power plant in China
ā¢ 470MW cogen / desalination plant development onJurong Island
ā¢ Incineration plant in China
Infrastructure:Utilities Engineering
Nicaragua(Power plant)
Salvador,Brazil
(Powerbarges)
Singapore(Cogen Plant)
Keppelās Presence
Utilities: Global Reach
Zunhua, China (Power plant)
33
Growth Strategy:
ā¢ Participate in Singaporeās utilities market:
ā Electricity marketing
ā Genco privatisation
ā¢ Overseas
ā Acquisitions
ā New projects
Infrastructure:Utilities Engineering (Contād)
34
Property
Outlook:ā¢ Launch of residential projects
ā Singaporeā Launches / Re-launches:
Ā» Caribbean at Keppel Bay
Ā» Cluny Hill bungalow plots
Ā» Parc Devon
Ā» Duchess Park
ā Chinaā One Park Avenue, Jingan, Shanghai
ā¢ Expected progress on divestments of investmentproperty
Ā» Pinnacles @ Wee Nam
Ā» Freesia Woods
Ā» 6 & 22-26 Mar Thoma Rd
SE Asia:Singapore,Malaysia,Thailand,
Philippines,Indonesia,Myanmar,Vietnam
Australia: Sydney
Keppelās Presence
Property: Global Presence
China:Shanghai, Qingdao,Suzhou, Kunming
Houston
Baku
36
Property (Contād)
Growth Strategy:ā¢ Focus on:
ā Property development for sale
ā Fund management
ā¢ Continue to build on premier brand name
ā¢ Participate in attractive growth prospects in Asianemerging marketsā China and Vietnam
37
Investments
Estimated value of investments, includinginvestment property, approximately S$5b
M1 is expected to continue with strongperformance
Outlook for SPC remains challenging
Committed to disciplined divestment approach
38
Strengthened OrganisationalStructure
ā¢ Development& FundManagementServices
ā¢ Network &UtilitiesEngineeringServices
ā¢ Rigbuilding,offshoreconversion, shiprepair &shipbuilding
Kevin WongProperty
C H TongOffshore & Marine
Ng Eng HoT G OngP W Yick
Infrastructure
Lim Chee OnnExecutive Chairman
Choo Chiau BengExecutive Director
Teo Soon HoeGroup Finance Director
39
Incentivising Performance
Senior Management remuneration to be linkedto achieving EVA and ROE targetsā¢ Implementation of a value-based incentive scheme
by 2H 2002
ā¢ Annual EVA audit in addition to accounts audit
Performance-based executive remunerationwith higher variable componentā¢ To motivate and reward performance, yet manage
cost structure
ā¢ To attract and retain good performers
40
Our Roadmap
Focus resources on core businesses
Disciplined investment and divestment management
Revamp reward system - implement ROE and EVAbased performance measures
Optimise capital structure
Effective and timely communication for greatertransparency
41
Our ultimate goal is to increaseshareholder value