21 October 2014

Keppel Land 3Q2014 Report Summary - October 2014

Recycling of Assets Lifts Profits
  • Net profit dropped marginally by 3.3% y-o-y at $308 million on lower contribution from property trading
  • Contributions from property investment and fund management rose, accounting for a higher share of 34.4% and 15.8% of net profit respectively
  • Net tangible asset per share rose to $4.59, 10.6% higher compared with $4.15 as at end-September last year
  • Net debt/equity ratio improved to 0.37x
The Group recorded net profit of $308 million for the first nine months of 2014, down marginally by 3.3% year-on-year (y-o-y). As part of its continuing efforts to recycle capital, Keppel Land divested Equity Plaza and received a net gain of $59.5 million. The gain from the sale of Equity Plaza and a share of Keppel REIT’s gain from the divestment of its 92.8% stake in Prudential Tower was partly offset by a loss of $20.3 million arising from the dilution of interest in Keppel REIT and higher tax expense. Net profit would have been higher by 7% if not for a tax write-back of $30.7 million in the same period in 2013.

Profit from property trading fell by 34.6% y-o-y to $135.9 million on lower contributions from Singapore and China projects as well as an absence of tax write-back. Profit from property investment rose by 1.2% y-o-y to $92.5 million due to increased contribution from Marina Bay Financial Centre Tower 3 (MBFC Tower 3) and share of Keppel REIT’s gain from divestment of Prudential Tower. Property investment’s share of net profit rose to 34.4% compared with 29% for the same period last year.

Earnings from fund management grew by 14.6% y-o-y to $42.5 million as a result of higher fee income from Keppel REIT and improved performance from Alpha Investment Partners (Alpha). Fund management made up a larger share of net profit at 15.8% of net profit compared with 11.8% in the same period last year.

Net tangible asset per share rose to $4.59 as at end-September 2014, up by 10.6% from $4.15 as at end-
September 2013. PB ratio is about 0.70x with annualized ROE is around 6%.

Details can be found here.

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