scope of briefing...1 9m 2009 results announcement 22 october 2009 1 22 october 2009 scope of...

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9M 2009 Results Announcement22 October 2009

111

22 October 2009

Scope of Briefing

• Address by Chief Executive Officer

• Group Financial Highlights

• Business Review & Outlook

222

• Business Review & Outlook

2

Address By

Chief Executive Officer

333

Improving Environment

• Some signs of recovery in global economyg y g y

China expected to grow beyond 8%US housing construction in August highest in nine monthsEurope looks on track to exit recession in 3Q09Singapore GDP forecast revised upwards to -2.5% to -2%to -2%

• Cautious optimism for modest near term growth

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3

Sustaining Our Performance

• PATMI grew 11% for 9M09 and 17% for 3Q09

• Annualised ROE reached 23%

5

Encouraging Developments

Some signs that offshore & i

Positive sentiments in k t

Strong potential in

i t l & marine orders returning

key property markets yield healthy sales

environmental engineering business

6Continue seeking out growth opportunities

4

Group Financial Highlights

777

9M09 Financial Performance

PATMI* 11% to S$922m

EPS

Annualised ROE

EVA*

Free Cash Flow

11% to S$922m

10% to 57.9cts

from 22.4% to 23.0%

S$101m to S$715m

46% to S$1 001m

8

Free Cash Flow

Net Cash

46% to S$1,001m

from 0.04x to 0.12x

* Excludes Exceptional Gains

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Financial Highlights

S$m 9M 2009 % Change9M 2008

Revenue 9,218 14EBITDA 1,211 28Operating Profit 1,092 29Profit Before Tax 1,353 13PATMI* 922 11EPS (cents) 57.9 10

8,071949848

1,200834

52.4

9

*Excludes Exceptional Gains of S$422m

S$m9M 2009 % % Change

Revenue by Segments

9M 2008 %

Offshore & Marine 6,501 71 16Property 909 10 26Infrastructure 1,771 19 2

Investments 37 - 42

Total 9,218 100 14

5,581 69722 9

1,742 22

26 -8,071 100

10

6

S$m9M 2008 %9M 2009 % % Change

Pre-tax Profit by Segments

Offshore & Marine 816 60 26

Property 307 23 15

Infrastructure 114 8 119

Investments 116 9 (50)

Total 1,353 100 13

54

22

4

20

100

646

268

52

234

1,200

11

S$m% Change

PATMI by Segments

9M 2008 %9M 2009 %

Offshore & MarinePropertyInfrastructureInvestmentsTotal

609 66133 14

81 999 11

922 100

261598

(49)

11

484 58116 14

41 5193 23

834 100

12

7

Consistent Earnings Growth

PATMI (S$m) EPS (Cents)

1,097 69.0

465 29.9564 36.1

751 47.7

1,026 64.9

2Q: 2Q:

3Q: 3Q:

4Q:4Q: 922 57.9

2Q: 2Q:

3Q: 3Q:

131H 2H

1Q: 1Q:1Q: 1Q:

Healthy Free Cash Flow

9M 2009S$m

Operating profit 1,092Depreciation & other non-cash items 134

Working capital changes (846)

Net cash from operating activities 228

Interest & tax paid (152)

1,226

14

Net cash from investing activities 773

Free Cash Flow 1,001

Investments & capex (814)Divestments & dividend income 1,587

Dividends Paid (639)

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Business Review & Outlook

151515

Offshore & Marine

161616

9

Long-Term Fundamentals Remain Sound

World Energy Consumption, 2006 – 2030

1717Sources: 2006 – Energy Information Administration (EIA) International Energy Annual 2006 (Jun-Dec 2008)

Projections – EIA, World Energy Projections Plus (2009)

• FloaTEC signed Letter of Intent for P-61 TLWP

New Projects

FloaTEC signed Letter of Intent for P 61 TLWP for Petrobras

• Rowan’s fourth jackup confirmed at Keppel AmFELS in Brownsville

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10

Continuing Execution Excellence

Completed YTDCompleted YTD 4Q094Q09

3 semis

7 jackups

1 FSO

4 major conversions/upgrades

2 semis

3 jackups

1 semi completion

2 major conversions/upgrades

191919

$6b net orderbook with deliveries into 2012

conversions/upgrades

9 specialised vessels

/ pg

9 specialised vessels

Property

202020

11

Market Review

SingaporeSingapore OverseasOverseas

• Sales volume in China remains high

• In Vietnam, sentiments continue to improve

• Private home prices grew 15.9% q-on-q in 3Q09

• Record sales volume expected

2121

• Some signs of recovery in Indonesia and India

• Growing business confidence stemmed decline in office rentals

Healthy Sales Volume

Project Sales in 3Q09

The Promont 7The Promont 7

Madison Residences 45

Caribbean at Keppel Bay 109

Reflections at Keppel Bay 23

Singapore

2222

Overseas

Country Sales in 3Q09

China 900

Vietnam 63

Indonesia 109

India 64

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K-REIT Asia Rights Issue

• Strengthening capital structure for greater • Strengthening capital structure for greater flexibility

• Positioning for strategic acquisitions in Singapore and across Asia

Financing asset enhancement initiatives to

232323

• Financing asset enhancement initiatives to maximise rental income

Infrastructure

242424

13

Securing Stable Income Stream

Acquisition of SenokoI i ti Pl tIncineration Plant

Only private operator of incineration plants for municipal solid waste in Singapore

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Generates strong cash flow and recurring earnings

Seed asset for Keppel Green Trust

Major Projects Near Completion

Keppel Seghers TuasWaste-To-Energy Plant

Qatar Domestic Solid Waste Management Facility

26

When completed, these projects will add significantly to recurring income and cash flow for Infrastructure Division

14

Outlook

Focused on Product and Execution Excellence

for Value Creation

272727

9M 2009 Results

Thank YouQ&A

282828

15

Additional Info

29

S$m 3Q 2008 % Change

Financial Highlights

3Q 2009$ 3Q 2008 % Change

Revenue (6)EBITDA 26Operating Profit 29Profit Before TaxPATMI

3Q 2009

3,038455420487319

2217

3,217360325400273

30

16

Total SingaporeOverseas9M 2009

Revenue by Customers

g pS$m %%

Offshore & Marine 6,501 5

Infrastructure 1,771 57Property 909 66

Investments 37 59Total 9,218 20

95

4334

4180

31

80% of total revenuecame from overseas customers

S$m%9M 2009 % % Change

EBITDA by Segments

9M 2008

Offshore & Marine 70843Property 20248Infrastructure 123

Investments (3)Total 1,211 100 28

10

-

34(4)

137NM

6662827257

52

12949 100

6

1

32

17

Capital/Gearing/ROE

S$m 30 Sep 2009 31 Dec 2008

Shareholders' Funds

Capital Employed Net CashNet Cash RatioROE

5,659

8,236

9990.12x

23.0%*

4,596

6,749

2750.04x

22.4%

33* Annualised ROE

Offshore & Marine

34

18

S$m 9M 2008 % Change

Financial Highlights –Offshore & Marine

9M 2009$ 9M 2008 % Change

Revenue 16EBITDA 34Operating Profit 36Profit Before TaxPATMI

9M 2009

6,501843759816609

2626

5,581628559646484

35


Financial Highlights –Offshore & Marine

3Q 2009$ 3Q 2008 % Change


3Q 2009

2,124295272293215

119

2,362262238264197

36

19

Offshore & Marine Review

S$85m contracts secured in 3Q 2009:$ Q1 FPSO Upgrade, 1 FSRU Conversion, 2 Tugs, 2 Semi Upgrades, 1 JU Upgrade

Major contract completions in 3Q 2009:

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1 Semi, 6 Semi Upgrades, 2 JUs, 1 JU Upgrade, 3 FPSO/FSO Conversions, 1 FSO, 2 Ice-Class Standby/Rescue Vessels, 2 AHTS, 1 Tanker Barge

Offshore & Marine OrderbookClientsBalance

Order

S$m

QGP / Seadrill / Noble / Great Eastern / Petrovietnam / For delivery in 2009

For deli er in 2011

QGP / Seadrill / Noble / Great Eastern / Petrovietnam / Perforadora Central / BW Offshore / Premuda / Seaways / Whitesea / Hadi Hammam / Greatship / Keppel Smit / Agip KCO

2 Semis / 1 Semi Completion / 3 Jack Ups / 2 FPSO Conversions/Upgrades / 4 AHTS / 2 PSVs / 2 Tugs / 1 Pontoon 104

For delivery in 2010

6 Semis / 7 Jack Ups / 4 FPSO Conversions/Upgrades / 1 FSRU Conversion/FPSO Modules/Integration / 1 Turret/Pipe Racks & Pontoon / 1 Derrick Pipelay Vessel / 1 Pipelay Barge / 1 Derrick Barge Upgrade / 2 AHTS / 2 PSVs / 2 Drillship Outfittings / 6 Tugs 2,627

Maersk / Ensco / Floatel / Petrobras / Skeie / Rowan / Seadrill / SBM / Golar / Agip KCO / Global Offshore / Bumi Armada / Smit International / Greatship / Frontier Drilling / Keppel Smit / Salalah Port

38TOTAL as at 30 Sep 2009 5,772


3 Semis / 2 Jack Ups / 1 Derrick Pipelay Vessel / 6 Tugs / 2 AHT 1,642

Ensco / QGP / Seadrill / Skeie / Rowan / Global Offshore / Keppel Smit / Seaways


2 Semis 1,399 Ensco

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Property

39


Financial Highlights – Property

9M 2009$ 9M 2008 % Change

Revenue 26EBITDA (4)Operating Profit (4)Profit Before TaxPATMI

9M 2009

909248239307133

1515

722257249268116

40

21

S$m 3Q 2008 % Change3Q 2009

Financial Highlights – Property

$ 3Q 2008 % Change


3Q 2009

362105102129

544846

21178758737

41

Infrastructure

42

22


Financial Highlights – Infrastructure

9M 2009$ 9M 2008 % Change


9M 2009

1,771123

98114

81119

98

1,74252285241

43


Financial Highlights – Infrastructure

3Q 2009$ 3Q 2008 % Change


3Q 2009

54845373525

6767

63921132115

44

23

Investments

45


Financial Highlights – Investments

9M 2009$ 9M 2008 % Change

Revenue 42EBITDA NMOperating Profit NMProfit Before TaxPATMI

9M 2009

37(3)(4)

11699

(50)(49)

261212

234193

46

24


Financial Highlights – Investments

3Q 2009$ 3Q 2008 % Change

Revenue (20)EBITDA NMOperating Profit NMProfit Before TaxPATMI

3Q 2009

410

93025

74

5(1)(1)2824

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Thi l t i f d l ki t t t hi h This release may contain forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. Such risks and uncertainties include industry and economic conditions, competition, and legal,

governmental and regulatory changes. The forward-looking statements reflect the current views of Management on future trends

and developments.

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ADDRESS BY KEPPEL CORPORATION LIMITED’S GROUP FINANCE DIRECTOR, TEO SOON HOE

AT THE 3Q 2009 RESULTS PRESENTATION

THURSDAY, 22 OCTOBER 2009

Group Financial Highlights (Slide 7) 1. 9M’09 Financial Performance (Slide 8)

The Group achieved a record PATMI of $922 million for the first nine months of 2009. This represents an increase of 11% over the same period last year. EPS was 57.9 cents for the nine months and annualised ROE reached a record of 23%. EVA was 16% higher at $715 million. Free cash flow continued to be healthy at above $1 billion, despite being lower than that of the corresponding period last year. Our net cash position was 12% at the end of the quarter.

2. Financial Highlights (Slide 9)

Revenue grew more than $1 billion to reach $9.2 billion for the nine months of this year.

Operating profit improved by 29% largely attributed to better margins achieved by Offshore & Marine and Infrastructure.

Pre-tax profit and PATMI increased at a lower rate due to lower contribution from Investments Division.

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3. Revenue by Segments (Slide 10) Total revenue was 14% higher than nine months 2008. Revenue from Offshore & Marine increased by 16% over the same period last year to reach $6.5 billion. It remained the largest contributor to Group revenue at 71%. Property revenue rose 26% due to higher recognition of the Reflections at Keppel Bay project. Infrastructure Division posted a slight increase in revenue as a result of higher contribution from Doha North Sewage Treatment Plant project in Qatar, which was partially offset by lower revenue of the Keppel Merlimau Cogen Plant due to lower oil prices.

4. Pre-tax Profit by Segments (Slide 11)

Offshore & Marine recorded more than $800 million in pre-tax profit. This is attributed to higher revenue and improved margins on its orderbook. Property Division registered a 15% increase in pre-tax earnings. Infrastructure more than doubled its pre-tax profit in the first nine months of the year because of higher contribution from Doha North project and better margins earned by Keppel Energy.

5. PATMI by Segments (Slide 12)

Offshore & Marine’s PATMI grew by 26% as compared to the same period last year, and it accounted for almost two-thirds of Group PATMI. PATMI from Property increased significantly in the third quarter largely owing to improved sentiments in the property markets in Singapore and the region. Infrastructure nearly doubled its profit with better performance by Keppel Integrated Engineering and Keppel Energy. Investments recorded a decline in profit due to the sale of SPC in June 2009.

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6. Consistent Earnings Growth (Slide 13) The Group has sustained PATMI at above $300 million in this quarter. Earnings of $922 million in the first nine months of this year have surpassed that of full year 2006. EPS has exceeded the 20 cents mark in a quarter for the first time, bringing the nine months EPS to a record of nearly 58 cents.

7. Healthy Free Cash Flow (Slide 14)

Net cash from operating activities was $228 million, despite negative working capital changes. The Group spent more than $800 million on acquisitions and operational capex. This included the acquisition of Senoko Incineration Plant, further development of our investment buildings and upgrading of offshore and marine facilities. After taking into account dividend income and divestment proceeds of approximately $1.6 billion, mainly from the sale of SPC, net cash from investing activities was $773 million. The Group’s free cash flow was at a robust level of $1 billion.

Business Review & Outlook (Slide 15)

1. Offshore & Marine (Slide 16)

1.1 Long-Term Fundamentals Remain Sound (Slide 17)

According to the Energy Information Administration’s forecast, world energy consumption is projected to expand by 44% between 2006 and 2030. Total energy demand of the non-OECD countries will increase by 73%, compared with an increase of 15% in the OECD countries. We believe that the long-term fundamentals of the oil & gas sector remain sound, and there will continue to be demand for offshore oil rigs and platforms. We will leverage on our design and construction capabilities to develop customised solutions to meet the needs of our customers.

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1.2 New Projects (Slide 18)

We believe our multi-pronged strategy of ‘Near-Market, Near-Customer’, timely delivery, technology development and forging of long-term relationships with our customers will strengthen our position as a choice partner for solutions. A Letter of Intent has been signed with Petrobras by FloaTEC, our joint venture company with J. Ray McDermott, on the P-61 Tension Leg Wellhead Platform. Rowan has confirmed the construction of its fourth EXL class jackup rig at Keppel AmFels in Brownsville.

1.3 Continuing Execution Excellence (Slide 19) Our yards will remain busy for the rest of the year with another 17 deliveries.

2. Property (Slide 20)

2.1 Market Review (Slide 21) Sentiments in the Singapore residential property market continued to improve in the third quarter, with both prices and sales volume firming up and gaining momentum. With improving global economic outlook, office rentals are also stabilising. Outside of Singapore, property markets have benefited from the various government stimulus packages.

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2.2 Healthy Sales Volume (Slide 22) Low mortgage rates have enhanced affordability and increased buying confidence, leading to healthy sales volume in 3Q’09 across Singapore, China, India, Indonesia and Vietnam. Riding on positive sentiments in Singapore, we launched The Promont and Madison Residences as well as units in Caribbean at Keppel Bay during the quarter. We recorded encouraging sales volume. Good sales in China were registered in the quarter, while volume has also picked up in the other regional markets.

2.3 K-REIT Asia Rights Issue (Slide 23)

The shareholders of K-REIT Asia have approved the rights issue yesterday. The rights issue will raise approximately $620 million. The rights issue is part of K-REIT Asia’s long-term strategy in growing its portfolio through prudent financial management and maintaining an optimal capital structure. It will provide funding flexibility and place K-REIT Asia in a better financial position to seize future acquisition opportunities.

3. Infrastructure (Slide 24)

3.1 Securing Stable Income Stream (Slide 25) We have completed the acquisition of Senoko Incineration Plant from the Singapore government on 31 August 2009. The plant’s capacity to treat 2,400 tonnes of waste a day will enable KIE to treat more than a third of Singapore’s total volume of waste sent for incineration. Our agreement with the Singapore Government for the provision of incineration services will create a steady recurring earnings stream and generate strong cash flows for Keppel.

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3.2 Major Projects Near Completion (Slide 26) The construction of Keppel Seghers Tuas Waste-To-Energy Plant and Domestic Solid Waste Management Facility in Qatar are making progress. When completed, these projects will increase the contribution of Infrastructure Division to the Group’s recurring earnings.

4. Outlook (Slide 27) A year has passed since the global financial markets and economies were thrown into turmoil with the collapse of Lehman Brothers in September last year.

Keppel has delivered a creditable performance against this backdrop.

We will continue to focus on product innovation, on time, on budget execution and pursue new contracts to create greater value for our stakeholders.

scope of briefing...1 9m 2009 results announcement 22 october 2009 1 22 october 2009 scope of...

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