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
• 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 (Cont’d)
Total payout to shareholders in 2001:
• Capital distribution: S$0.50 per share
• Dividends: S$0.16 per share
Privatisations
• KFEI - completed in Nov 2001
• 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 …
15% growth
PATMI (Pre-Exceptionals)
S$m
8
Financial Summary (Cont’d)
(S$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 (Cont’d)
Net Debt 4,525 5,034
Shareholders’ 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(Cont’d)
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
14
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
• 37% stake in Keppel Capital S$1,850m• Stake in toll road & KE Steam in China 101m• 1% stake in OUB 100m• Real estate (of KFEI, KTT) assets 50m• 5.1% stake in Australand 38m• 3 ships owned by KTT 30m• Bayswater 22m• Aljunied Building 12m• Nana Tai Mansion 6m• 50% stake in Apac BizInfo & Call Centre 5m
Total: S$ 2.2b
At least 1 major divestment in 2002
16
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
• Privatisation of KHZ & KTT
• 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:-• Offshore orderbook includes
– Newbuildings of 4 jack-up rigs, 1 tension leg platformand 1 semi-submersible for delivery between 2002 and2004.
– 2 conversions / upgrades– 13 upgrades / repairs
• Marine orderbook (excluding shiprepairs)includes– 12 newbuildings for delivery between 2002 and 2003– 2 FPSO conversions
24
Offshore & Marine (Cont’d)
Outlook:• 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
• FPSO / FSO conversion market remains strong, bolstered byactive offshore production
• Shiprepair activity expected to remain at current level
Privatisation of KHZ• Synergies of S$10m expected from revenue uplift and cost
savings in 2002; more expected in subsequent years
Texas AMFELS(1 yard)
BrazilFELS Setal/BrasFELS(2 yards)
Bulgaria
Norway (1 yard)
CaspianSea
UAE(1 yard)
SingaporeKFELS
(2 yards)KS
(2 yards)KSD
(2 yards)
Philippines(3 yards)
China Engineering
Office
Keppel O&M yards
Other facilities
HoustonCenter
Offshore & Marine: Global Reach
26
Offshore & Marine (Cont’d)
Growth Strategy:• Entrench Keppel as a global leader in the O&M
business
• Develop new product designs to meet new marketdemand
• Adopt emerging drilling/production technologies
• Acquire yards in strategic locations to further “nearmarket, near customer” strategy
• Migrate up the value chain:– Grow intellectual capital
27
Infrastructure:Network Engineering
Healthy order book (2002/03):• Wireless: S$ 213m• 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:
• Increasing market share in Europe through EchoBroadband with the upgrading of cable TV networksin Germany, France, Spain & The Netherlands
• Continued rollout of wireless infrastructure for telcosin S. E. Asia, where we are a leading integrationsolution partner
29
Infrastructure:Network Engineering
Global Reach
30
Infrastructure:Network Engineering (Cont’d)Growth Strategy:• Capitalise on high growth prospects:
– Outsourcing trend continues– Network upgrading cycle in Asia and Europe
• Focus on growing intellectual capital
– Own proprietary cable / broadband design planning tools
– Acquire proprietary application technology to service Telcos
• Leverage relationships with strategic partners
– Already the preferred partner of top equipment vendors
31
Outlook:• Enhance yield on current asset portfolio:
– 190MW power barge project in Brazil
– 60MW power plant in Nicaragua
– 100MW Zunhua power plant in China
• 470MW cogen / desalination plant development onJurong Island
• Incineration plant in China
Infrastructure:Utilities Engineering
Nicaragua(Power plant)
Salvador,Brazil
(Powerbarges)
Singapore(Cogen Plant)
Keppel’s Presence
Utilities: Global Reach
Zunhua, China (Power plant)
33
Growth Strategy:
• Participate in Singapore’s utilities market:
– Electricity marketing
– Genco privatisation
• Overseas
– Acquisitions
– New projects
Infrastructure:Utilities Engineering (Cont’d)
34
Property
Outlook:• Launch of residential projects
– Singapore– Launches / Re-launches:
» Caribbean at Keppel Bay
» Cluny Hill bungalow plots
» Parc Devon
» Duchess Park
– China– One Park Avenue, Jingan, Shanghai
• Expected progress on divestments of investmentproperty
» Pinnacles @ Wee Nam
» Freesia Woods
» 6 & 22-26 Mar Thoma Rd
SE Asia:Singapore,Malaysia,Thailand,
Philippines,Indonesia,Myanmar,Vietnam
Australia: Sydney
Keppel’s Presence
Property: Global Presence
China:Shanghai, Qingdao,Suzhou, Kunming
Houston
Baku
36
Property (Cont’d)
Growth Strategy:• Focus on:
– Property development for sale
– Fund management
• Continue to build on premier brand name
• Participate in attractive growth prospects in Asianemerging markets– 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
• Development& FundManagementServices
• Network &UtilitiesEngineeringServices
• 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 targets• Implementation of a value-based incentive scheme
by 2H 2002
• Annual EVA audit in addition to accounts audit
Performance-based executive remunerationwith higher variable component• To motivate and reward performance, yet manage
cost structure
• 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