KEPPEL CORPORATION LIMITED

Transcription

1 KEPPEL CORPORATION LIMITED Co. Reg. No N (Incorporated in the Republic of Singapore) THIRD QUARTER AND NINE MONTHS 2013 FINANCIAL STATEMENTS TABLE OF CONTENTS Paragraph Description Page CHIEF EXECUTIVE OFFICER S ADDRESS I III FINANCIAL STATEMENTS GROUP PROFIT AND LOSS ACCOUNT 1 2 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 4 3 BALANCE SHEETS 6 4 STATEMENTS OF CHANGES IN EQUITY 9 5 CONSOLIDATED STATEMENT OF CASH FLOWS 16 6 AUDIT 19 7 AUDITORS REPORT 19 8 ACCOUNTING POLICIES 19 9 CHANGES IN THE ACCOUNTING POLICIES REVIEW OF GROUP PERFORMANCE VARIANCE FROM FORECAST STATEMENT PROSPECTS DIVIDEND SEGMENT ANALYSIS REVIEW OF SEGMENT PERFORMANCE INTERESTED PERSON TRANSACTIONS 27 CONFIRMATION BY THE BOARD 28

2 KEPPEL CORPORATION LIMITED Address by Mr Choo Chiau Beng, Chief Executive Officer THIRD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2013 Tenuous Global Outlook 1 Financial markets around the world have been volatile from concerns over global liquidity. Businesses must prepare for rising interest rates and costs with the US QE tapering programme. 2 Emerging economies, though better able to weather headwinds now than before, remain vulnerable. In China, the market in recent months saw a slight rebound triggered by expectation of policy support and economic stabilisation, with financial institutions lifting their forecast of growth with cautious optimism. 3 Singapore demonstrated resilience, achieving a better than expected third quarter GDP of 5.1% as compared to a year ago. 4 Brent crude price remained around US$100 per barrel. Performance Highlights 5 Keppel Corp s net profit for 3Q 2013 was $403 million, excluding revaluation, major impairment and divestments, which is 20% higher than the same period last year. 6 On a nine months basis, net profit was $1,080 million, 33% lower than the same period last year, in the absence of revenue recognition from deliveries of Reflections at Keppel Bay units under the deferred payment scheme. Our annualised ROE was 15.4% and EVA declined to $648 million from $1,245 million. 7 We are mindful of the challenges ahead of us but we will continue to focus on capturing opportunities and creating value through technology and innovation as well as process and facility enhancements. Offshore & Marine 8 In Offshore & Marine, the discoveries in the North Sea, Mexico and Africa continue to fuel optimism and investment for further exploration work. The aging deepwater fleet as well as high utilisation and day rates for newer and more advanced jackups and ultradeepwater units will continue to contribute to sustained demand for our products and services. 9 For this year, Keppel Offshore & Marine has so far secured about $5 billion in new orders. Our net orderbook stands at a record of $13.6 billion as at end September with work extending to Having delivered 18 rigs to date, Keppel FELS has demonstrated its strong project execution capabilities in completing its projects safely, ahead or on time and within budget. In addition, with the rigs being built to repeat designs, we are able to reap efficiencies in their construction. 11 Our Near Market, Near Customer strategy has worked well for us. 12 Keppel has been delivering projects for Mexico since 2004, having completed seven jackup rigs and two accommodation platforms. It is also currently building 11 more jackup rigs to be deployed in Mexico. 13 We have recently inked an MOU with subsidiaries of Mexico's national oil company, Petroleos Mexicanos (PEMEX), the world's fifth largest producer of crude oil, to jointly develop, own and operate a yard facility in the Port of Altamira. This will enable Keppel to further participate in the growing Mexico oil & gas market and enjoy a first mover advantage. Chief Executive Officer s Remarks, I

3 14 We have also expanded our footprint in Azerbaijan with a new 62-ha yard in Baku in joint venture with State Oil Company of Azerbaijan Republic (SOCAR) and Azerbaijan Investment Company (AIC). Baku Shipyard will build upon the experience of Caspian Shipyard, also a joint venture between Keppel O&M and SOCAR, and enable us to unlock synergy in our Caspian operations. Our enhanced presence in Azerbaijan will place us in a good position to capture more growth opportunities and contribute to the region's energy sector. 15 Across our network of Keppel yards, we are also working at improving competencies and productivity as well as ensuring high safety standards. By galvanising our collective strengths, Keppel is able to provide innovative, comprehensive and compelling solutions to our customers wherever they may be. Infrastructure 16 Since its reorganisation as Keppel Infrastructure, the new entity has focused on building up its strengths in our power and gas business, tightening operations of WTE facilities in our portfolio and providing related technology solutions. 17 Keppel Merlimau Cogen's new 800MW co-gen plant has begun operations and will provide steady contributions. 18 For Keppel Integrated Engineering's Qatar and Greater Manchester projects, we have found the operating environments very challenging. We will continue to focus attention on execution and delivery of the projects. 19 Keppel T&T continues to build on its reputation as a choice provider for high-quality, reliable logistics and distribution services in China. Its subsidiary Keppel Logistics (Foshan) has acquired a 60%-stake in Foshan Sanshui Port Development Co, its third port project in China. With our proven track record in Lanshi Port, we will replicate our integrated port logistics model and grow Sanshui Port to meet the demands of our customers for higher value logistics solutions. 20 Meanwhile, work has commenced for Keppel T&T s second food logistics project in Lu'an City, Anhui Province, in joint venture with the Jin'an District Government and other partners to provide warehousing, cold chain and transportation services for the distribution of food and agricultural produce in the region. When completed, it will be well positioned to capture demand arising for better food safety and also from the growing middle class in Central China. Property 21 Our Property Division sold over 3,600 homes year to date. This has surpassed the total number of 2,350 homes we sold in In Singapore, the seventh round of market-cooling measures and the total debt servicing ratio framework introduced by the MAS have had their impact on home buyers. 23 For The Glades, our first residential joint venture project with China Vanke, we have sold over 80 units while Corals at Keppel Bay continued to receive positive interest, with sales of 158 units as at end September. 24 Property prices continue to rise in China despite slower growth in the economy and government cooling measures. We have achieved modest sales from our properties, particularly in Shanghai and Chengdu. At Tianjin Eco-City, which is celebrating its fifth anniversary this year, we have sold about 77% of launched units to date at our Seasons Park development. Moving ahead, we will launch more homes keeping a close eye on the market. 25 To bolster our commercial portfolio, we continue to build on our expertise in Singapore and will bring that experience to bear by capturing opportunities in Asia. We now have developments in China, Indonesia and Vietnam which are all progressing at different stages. 26 In Singapore's CBD and Marina Bay, office occupancy levels and average rents have held steady. Marina Bay Financial Tower 3 has crossed the 90% occupancy rate, and continues to attract tenants from diverse sectors. Chief Executive Officer s Remarks, II

4 27 In Indonesia, Keppel Land is divesting its 51% stake in the township, Jakarta Garden City, to its joint venture partner, Modernland. It has also divested its interest in Hotel Sedona Manado. 28 The unlocking of value in these projects would generate a potential net gain of about $155 million which would enable Keppel Land to pursue other opportunities in Indonesia, with a focus on Jakarta. We believe that Indonesia's steady economic growth underpinned by sound fundamentals will continue to drive demand for investment-grade offices and quality homes. 29 With a strong financial position, Keppel Land will be able to make strategic acquisitions in its key markets. 30 Meanwhile, we will continue to grow our fee-based income to capture greater value for the Group. While Keppel REIT has further strengthened its portfolio in Australia, Alpha Investment Partners has successfully closed the Alpha Asia Macro Trends Fund II with US$1.65 billion. Creating Sustainable Value 31 As we move into the last quarter of 2013, we expect volatility and challenges in our operating environment. 32 Keppel has performed creditably, not just by leveraging existing strengths and competencies but also actively seeking out new opportunities and growth adjacencies. 33 Ultimately, we are focused on creating enduring value for our stakeholders through maintaining our lead as a provider of choice for solutions in the offshore & marine industry and sustainable urbanisation. 34 I shall now let Chin Hua, our Chief Financial Officer and CEO-Designate, take you through a review of the Group's third quarter financial performance. Thank you. Chief Executive Officer s Remarks, III

5 KEPPEL CORPORATION LIMITED Third Quarter and Nine Months 2013 Financial Statements UNAUDITED RESULTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2013 The Directors of Keppel Corporation Limited advise the following unaudited results of the Group for the third quarter and nine months ended 30 September GROUP PROFIT AND LOSS ACCOUNT for the third quarter and nine months ended 30 September Note Third Quarter Nine Months +/- % +/- % Revenue 2,947,232 3,218, ,781,839 10,966, Materials & subcontract costs (i) (1,896,097) (2,298,536) (6,001,119) (7,511,199) Staff costs (ii) (408,360) (395,585) +3.2 (1,124,967) (1,157,205) -2.8 Depreciation & amortisation (64,846) (52,814) (178,207) (153,624) Other operating expenses (iii) (9,892) (39,118) (89,592) (155,851) Operating profit 568, , ,387,954 1,988, Investment income 8, > ,054 3, Interest income 43,995 42, , , Interest expenses (iv) (38,565) (35,580) +8.4 (117,125) (102,315) Share of results of associated companies (v) 86,910 58, , , Profit before tax 669, , ,684,834 2,172, Taxation 1b (125,933) (92,274) (294,787) (344,759) Profit for the period 543, , ,390,047 1,827, Attributable to: Shareholders of the Company 457, , ,161,394 1,618, Non-controlling interests 85,858 59, , , , , ,390,047 1,827, Earnings per ordinary share - basic 25.3 cts 19.3 cts cts 90.3 cts diluted 25.1 cts 19.2 cts cts 89.4 cts Keppel Corporation Limited, Page 1 of 28

6 NOTES TO GROUP PROFIT AND LOSS ACCOUNT 1a. Pre-tax profit of the Group is arrived at after charging/(crediting) the following: Note Third Quarter Nine Months +/- % +/- % Share-based payment expenses 24,966 17, ,794 33, Profit on sale of fixed assets (vi) (1,255) (4,546) (3,538) (4,956) Profit on sale of investments (vii) (12,975) NM (147,769) NM Provision/(write-back) - stocks & work-in-progress 151 (17) NM 29 (3,105) NM - doubtful debts (viii) 331 NM (251) (26,710) Bad debts written off Stocks written off 292 NM Fair value (gain)/ loss - Investments (ix) (2,481) (6,679) (10,859) (14,457) Forward contracts (x) 2,495 22, ,257 46, Financial derivatives (6,184) (651) >500.0 (8,267) 2,165 NM Foreign exchange (gain)/ loss (xi) (9,012) 15,143 NM (29,912) 30,971 NM Write-back of provision for restructuring of operations and others (xii) NM (26,831) NM Profit on disposal of subsidiaries (xiii) (61,087) (16,676) (61,087) (16,676) NM Not Meaningful Note: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Materials & subcontract costs decreased mainly as a result of lower revenue from the Offshore & Marine Division. Staff costs decreased for the nine months ended 30 September 2013 mainly due to lower manpower cost in the Offshore & Marine Division. Lower other operating expenses for the nine months ended 30 September 2013 was due mainly to foreign exchange gain in the current period compared to foreign exchange loss in the corresponding period in 2012 (Note (xi)), the write-back of provision for restructuring of operations and others (Note (xii)) and the profit on disposal of subsidiaries (Note (xiii)), partially offset by lower profit on sale of fixed assets (Note (vi)) and lower write-back of doubtful debts (Note (viii)). Higher interest expense was mainly attributable to increased borrowings. Share of profits of associated companies was higher due mainly to higher profits from associated companies in the Property Division. Profit on sale of fixed assets in the current period was largely attributable to disposals of tugs in the Offshore & Marine Division. There was no sale of investments in the current period. Profit on sale of investments in prior period was largely due to disposals of listed equities. Write-back of provision for doubtful debts was due to collection from delinquent customers. Fair value gain (mark-to-market) on investment portfolio held for trading was due to rise in stock prices. Hedging differential on forward exchange contracts was due to elapse of time and fluctuations in interest rate. Keppel Corporation Limited, Page 2 of 28

7 (xi) (xii) (xiii) Foreign exchange gain mainly arose from the revaluation of assets denominated in United States dollar, as a result of appreciation of United States dollar against Singapore dollar. The foreign exchange loss in prior period was mainly due to the depreciation of United States dollar against Singapore dollar. The write-back was mainly in relation to the reversal of provision following the finalisation of the sales of the power barge in the Infrastructure Division. The profit on disposal of subsidiaries for the current period arose from the divestment of a subsidiary, Montfort Development Pte Ltd, which has a 50% indirect interest in Hotel Sedona Manado in Indonesia and the deconsolidation of Keppel REIT due to loss of control. 1b. Taxation expenses were lower because of decreased profit and write-back of tax following finalisation of prior period s tax assessment. 1c. Earnings per ordinary share Earnings per ordinary share of the Group based on net profit attributable to shareholders:- Third Quarter Nine Months +/-% +/-% (i) Based on weighted average number of shares 25.3 cts 19.3 cts cts 90.3 cts Weighted average number of shares ( 000) 1,805,164 1,792, ,805,164 1,792, (ii) On a fully diluted basis 25.1 cts 19.2 cts cts 89.4 cts Adjusted weighted average number of shares ( 000) 1,823,316 1,810, ,823,316 1,810, d. There was no extraordinary item during the period. Keppel Corporation Limited, Page 3 of 28

8 2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the third quarter and nine months ended 30 September Note Third Quarter Nine Months +/- % +/- % Profit for the period 543, , ,390,047 1,827, Items that may be reclassified subsequently to profit & loss account: Available-for-sale assets - Fair value changes arising during the period (i) 20,089 28, ,907 46, Realised and transferred to profit & loss account (ii) 407 (1,200) NM 415 (57,720) NM Cash flow hedges - Fair value changes arising during the period, net of tax (iii) (98,883) 284,478 NM (272,007) 224,450 NM - Realised and transferred to profit & loss account (iv) 10,299 12, ,607 5, Foreign exchange translation - Exchange differences arising during the period (v) (2,982) (159,121) ,067 (272,455) NM - Realised and transferred to profit & loss account 17,360 1,814 > ,360 (316) NM Share of other comprehensive (losses)/income of associated companies - Available-for-sale assets (6,591) 521 NM (3,630) 2,082 NM - Cash flow hedges 2,585 (4,020) NM 3,303 (4,673) NM - Foreign exchange translation (6,039) (23,091) ,463 (25,302) NM Other comprehensive (losses)/income for the period, net of tax (63,755) 140,115 NM (80,515) (82,611) -2.5 Total comprehensive income for the period 479, , ,309,532 1,745, Attributable to: Shareholders of the Company 396, , ,043,282 1,633, Non-controlling interests 82,938 (8,359) NM 266, , NM Not Meaningful 479, , ,309,532 1,745, Note: (i) (ii) (iii) Fair value changes were attributable to movements in quoted prices of available-for-sale assets. These represented fair value changes on available-for-sale assets, which were transferred to profit & loss account upon realisation. Fair value differences were due mainly to the hedging differential on forward exchange contracts, which were largely entered to hedge exposures against United States dollar. The fair value loss noted in the current period was as a result of the hedge rate being lower than the spot rate and the fair value gain for the prior period was due to the hedge rate being higher than the spot rate. Keppel Corporation Limited, Page 4 of 28

9 (iv) (v) These represented cash flow hedges, which were transferred to profit & loss account upon realisation. These exchange differences arose from the translation of financial statements of foreign operations whose functional currencies are different from that of the Group s presentation currency as well as from the translation of foreign currency loans that form part of the Group s net investment in foreign operations. The translation losses for 3Q2013 arose largely from weakening of Brazilian Real against the Singapore dollar, while the translation gains for YTD 3Q2013 arose largely from strengthening of foreign currencies, such as United States dollar, Renminbi, Brazilian Real and Euro against the Singapore dollar. The translation losses for 3Q2012 and YTD 3Q2012 arose largely from weakening of foreign currencies, such as United States dollar, Renminbi, Brazilian Real and Euro against the Singapore dollar. Keppel Corporation Limited, Page 5 of 28

10 3. BALANCE SHEETS as at 30 September $'000 G r o u p $'000 $'000 C o m p a n y $'000 Share capital 1,201,958 1,123,590 1,201,958 1,123,590 Reserves 7,805,669 8,122,362 4,123,751 4,581,934 Share capital & reserves 9,007,627 9,245,952 5,325,709 5,705,524 Non-controlling interests 3,611,228 4,332,174 Capital employed 12,618,855 13,578,126 5,325,709 5,705,524 Represented by: Fixed assets 3,628,867 3,337, Investment properties 1,985,343 5,423,060 Subsidiaries 5,094,497 4,933,380 Associated companies 5,276,026 5,266,602 Investments 234, ,380 Long term assets 209, , Intangibles 86, ,608 11,420,893 14,501,529 5,095,292 4,934,107 Current assets Stocks & work-in-progress in excess of related billings 9,457,000 7,660,898 Amounts due from: - subsidiaries 3,400,787 2,655,295 - associated companies 981, ,737 7,309 1,719 Debtors 2,509,201 1,839,085 30, ,737 Short term investments 519, ,107 Bank balances, deposits & cash 3,640,692 4,055,176 3,030 3,773 17,107,971 14,669,003 3,441,511 2,818,524 Current liabilities Creditors 5,861,265 5,535, , ,872 Billings on work-in-progress in excess of related costs 2,374,918 1,619,475 Provisions 125,779 74,874 Amounts due to: - subsidiaries 1,266, ,206 - associated companies 136,665 63,495 1 Term loans 518,330 1,005, ,125 Taxation 415, ,862 20,805 21,097 Bank overdrafts 475 9,432,660 9,064,221 1,706, ,175 Net current assets 7,675,311 5,604,782 1,735,349 2,276,349 Non-current liabilities Term loans 6,071,445 6,202,345 1,500,000 1,500,000 Deferred taxation 405, ,840 4,932 4,932 6,477,349 6,528,185 1,504,932 1,504,932 Net assets 12,618,855 13,578,126 5,325,709 5,705,524 Group net debt 2,949,558 3,152,723 n.a. n.a. Group net gearing ratio 0.23x 0.23x n.a. n.a. Keppel Corporation Limited, Page 6 of 28

11 NOTES TO BALANCE SHEETS 3a. Group s borrowings and debt securities (i) Amount repayable in one year or less, or on demand Secured As at As at Unsecured Secured Unsecured 214, , , ,723 (ii) Amount repayable after one year Secured As at As at Unsecured Secured Unsecured 424,845 5,646,600 1,219,852 4,982,493 (iii) Details of any collateral Certain subsidiaries of the Company pledged their assets in order to obtain loans from financial institutions. The Group has mortgaged certain properties and assets of up to an aggregate amount of $2,119,656,000 (31 December 2012: $3,104,674,000) to banks for loan facilities. 3b. Net asset value Group Company /-% /-% Net asset value per ordinary share * $4.98 $ $2.95 $ Net tangible asset per ordinary share * $4.94 $ $2.95 $ * Based on share capital of 1,807,442,967 ordinary shares as at the end of the period (31 December 2012: 1,797,607,004 ordinary shares). Keppel Corporation Limited, Page 7 of 28

12 3c. Balance sheet analysis Group shareholders funds decreased from $9.25 billion at 31 December 2012 to $9.01 billion at 30 September The decrease was mainly attributable to fair value loss on cash flow hedges, payment of final dividend of 27.0 cents per share and distribution of dividend in specie of Keppel REIT units equivalent to 28.6 cents per share in respect of financial year 2012, as well as interim dividend of 10.0 cents per share and a special dividend in specie equivalent to 9.5 cents per share for the half year ended 30 June 2013, partially offset by retained profits for the period and foreign exchange translation gains. Group total assets of $28.53 billion at 30 September 2013 were $0.64 billion or 2.2% lower than the previous year end. Increase in fixed assets was largely due to capital expenditure for the expansion of Keppel Merlimau Cogen power plant, acquisition of an industrial building by Infrastructure Division for development of a new data centre and other operational capex. Investment properties was lower as a result of the deconsolidation of Keppel REIT due to loss of control. Higher stocks & work-in-progress were due to land acquisition costs and development expenditure incurred for projects in the Property Division, partly offset by lower work-in-progress for the Offshore & Marine Division. Higher level of debtors was largely due to higher billings from Offshore & Marine Division. Group total liabilities of $15.91 billion at 30 September 2013 were $0.32 billion or 2.1% higher than the previous year end. Lower level of term loans was mainly due to the deconsolidation of Keppel REIT, partly offset by bank borrowings for working capital requirements, operational capital expenditure and acquisitions. Increase in creditors was attributable mainly to purchase consideration payable in relation to the acquisition of a residential site in Sheshan area in Shanghai by Property Division. Group net debt at 30 September 2013 was $2.95 billion as compared to group net debt of $3.15 billion at 31 December This was due mainly to the deconsolidation of Keppel REIT, partly offset by capital expenditure, investment in associated companies and dividend payment. Keppel Corporation Limited, Page 8 of 28

13 4. STATEMENTS OF CHANGES IN EQUITY for the third quarter and nine months ended 30 September 4a. Statement of changes in equity of the Group Share Capital $'000 Attributable to owners of the Company Foreign Exchange Capital Revenue Translation Reserves Reserves Account $'000 $'000 $'000 Share Capital & Reserves $'000 Noncontrolling Interests $'000 Capital Employed $' As at 1 January 1,123, ,263 7,815,216 (375,117) 9,245,952 4,332,174 13,578,126 Total comprehensive income for first half Profit for first half 703, , , ,628 Other comprehensive income * (143,461) 86,184 (57,277) 40,517 (16,760) Total comprehensive income for first half (143,461) 703,833 86, , , ,868 Transactions with owners, recognised directly in equity Contributions by and distributions to owners Dividends paid (1,004,446) (1,004,446) (1,004,446) Share-based payment 14,967 14, ,379 Transfer of statutory, capital and other reserves to revenue reserves 5,710 (5,710) Dividend paid to non-controlling shareholders (126,670) (126,670) Cash subscribed by non-controlling shareholders 65,480 65,480 Shares issued 76,629 (42,304) 34,325 34,325 Total contributions by and distributions to owners 76,629 (27,337) (998,736) (5,710) (955,154) (60,778) (1,015,932) Changes in ownership interests in subsidiaries Disposal of interest in a subsidiary company without loss of control 58,771 58, , ,193 Total change in ownership interests in subsidiaries 58,771 58, , ,193 Total transactions with owners 76,629 (27,337) (939,965) (5,710) (896,383) 772,644 (123,739) As at 30 June 1,200, ,465 7,579,084 (294,643) 8,996,125 5,288,130 14,284,255 Keppel Corporation Limited, Page 9 of 28

14 4a. Statement of changes in equity of the Group (cont d) 2013 Share Capital Attributable to owners of the Company Foreign Exchange Capital Revenue Translation Reserves Reserves Account Share Capital & Reserves Noncontrolling Interests Capital Employed Total comprehensive income for third quarter Profit for third quarter 457, ,561 85, ,419 Other comprehensive income * (73,789) 12,954 (60,835) (2,920) (63,755) Total comprehensive income for third quarter (73,789) 457,561 12, ,726 82, ,664 Transactions with owners, recognised directly in equity Contributions by and distributions to owners Dividends paid (352,086) (352,086) (352,086) Share-based payment 24,086 24, ,716 Transfer of statutory, capital and other reserves to revenue reserves 1,046 (6,756) 5,710 Dividend paid to non-controlling shareholders (44,494) (44,494) Cash subscribed by non-controlling shareholders Shares issued 1,739 (192) 1,547 1,547 Total contributions by and distributions to owners 1,739 24,940 (358,842) 5,710 (326,453) (43,741) (370,194) Changes in ownership interests in subsidiaries Disposal of interest in a subsidiary company with loss of control (58,771) (58,771) (1,716,099) (1,774,870) Total change in ownership interests in subsidiaries (58,771) (58,771) (1,716,099) (1,774,870) Total transactions with owners 1,739 24,940 (417,613) 5,710 (385,224) (1,759,840) (2,145,064) As at 30 September 1,201, ,616 7,619,032 (275,979) 9,007,627 3,611,228 12,618,855 * Details of other comprehensive income have been included in the consolidated statement of comprehensive income. Keppel Corporation Limited, Page 10 of 28

15 4a. Statement of changes in equity of the Group (cont d) Share Capital Attributable to owners of the Company Capital Reserves Revenue Reserves Foreign Exchange Translation Account Share Capital & Reserves Noncontrolling Interests Capital Employed 2012 As at 1 January 1,016, ,357 6,358,404 (135,498) 7,699,375 4,061,920 11,761,295 Total comprehensive income for first half Profit for first half 1,271,717 1,271, ,008 1,421,725 Other comprehensive income * (102,700) (89,766) (192,466) (30,260) (222,726) Total comprehensive income for first half (102,700) 1,271,717 (89,766) 1,079, ,748 1,198,999 Transactions with owners, recognised directly in equity Contributions by and distributions to owners Dividend paid (466,423) (466,423) (466,423) Share-based payment 14,632 14, ,420 Transfer of statutory, capital and other reserves to revenue reserves 66 (66) Dividend paid to non-controlling shareholders (174,813) (174,813) Cash subscribed by non-controlling shareholders 94,698 94,698 Shares issued 81,866 (24,750) 57,116 57,116 Total contributions by and distributions to owners 81,866 (10,052) (466,489) (394,675) (79,327) (474,002) Changes in ownership interests in subsidiaries Acquisition of subsidiaries 187, ,342 Acquisition of additional interest in subsidiaries 1,242 1,242 (210,161) (208,919) Total change in ownership interests in subsidiaries 1,242 1,242 (22,819) (21,577) Total transactions with owners 81,866 (10,052) (465,247) (393,433) (102,146) (495,579) As at 30 June 1,097, ,605 7,164,874 (225,264) 8,385,193 4,079,522 12,464,715 Keppel Corporation Limited, Page 11 of 28

16 4a. Statement of changes in equity of the Group (cont d) 2012 Share Capital Attributable to owners of the Company Foreign Exchange Capital Revenue Translation Reserves Reserves Account Share Capital & Reserves Noncontrolling Interests Capital Employed Total comprehensive income for third quarter Profit for third quarter 346, ,403 59, ,068 Other comprehensive income * 318,548 (110,409) 208,139 (68,024) 140,115 Total comprehensive income for third quarter 318, ,403 (110,409) 554,542 (8,359) 546,183 Transactions with owners, recognised directly in equity Contributions by and distributions to owners Dividend paid (323,033) (323,033) (323,033) Share-based payment 16,893 16, ,648 Transfer of statutory, capital and other reserves to revenue reserves 6 (6) Dividend paid to non-controlling shareholders (24,658) (24,658) Cash subscribed by non-controlling shareholders 2,519 2,519 Other adjustments Shares issued 19,601 (193) 19,408 19,408 Total contributions by and distributions to owners 19,601 16,706 (322,897) (286,590) (20,882) (307,472) Changes in ownership interests in subsidiaries Acquisition of subsidiaries 37,457 37,457 Acquisition of additional interest in subsidiaries (2,703) (2,703) (13,643) (16,346) Disposal of interest in a subsidiary company with loss of control (14,809) (14,809) Total change in ownership interests in subsidiaries (2,703) (2,703) 9,005 6,302 Total transactions with owners 19,601 14,003 (322,897) (289,293) (11,877) (301,170) As at 30 September 1,117, ,156 7,188,380 (335,673) 8,650,442 4,059,286 12,709,728 * Details of other comprehensive income have been included in the consolidated statement of comprehensive income. Keppel Corporation Limited, Page 12 of 28

17 4b. Statement of changes in equity of the Company Share Capital Capital Reserves Revenue Reserves Total 2013 As at 1 January 1,123, ,396 4,401,538 5,705,524 Profit /Total comprehensive income for first half 810, ,845 Transactions with owners, recognised directly in equity Dividend paid (1,004,446) (1,004,446) Share-based payment 14,330 14,330 Shares issued 76,629 (42,304) 34,325 Total transactions with owners 76,629 (27,974) (1,004,446) (955,791) As at 30 June 1,200, ,422 4,207,937 5,560,578 Profit /Total comprehensive income for third quarter 92,514 92,514 Transactions with owners, recognised directly in equity Dividend paid (352,086) (352,086) Share-based payment 23,156 23,156 Shares issued 1,739 (192) 1,547 Total transactions with owners 1,739 22,964 (352,086) (327,383) As at 30 September 1,201, ,386 3,948,365 5,325, As at 1 January 1,016, ,496 4,031,956 5,209,564 Profit /Total comprehensive income for first half 1,145,858 1,145,858 Transactions with owners, recognised directly in equity Dividend paid (466,423) (466,423) Share-based payment 13,438 13,438 Shares issued 81,866 (24,750) 57,116 Total transactions with owners 81,866 (11,312) (466,423) (395,869) As at 30 June 1,097, ,184 4,711,391 5,959,553 Profit /Total comprehensive income for third quarter 110, ,515 Transactions with owners, recognised directly in equity Dividend paid (323,033) (323,033) Share-based payment 15,838 15,838 Shares issued 19,601 (193) 19,408 Other adjustments Total transactions with owners 19,601 15,645 (322,891) (287,645) As at 30 September 1,117, ,829 4,499,015 5,782,423 Keppel Corporation Limited, Page 13 of 28

18 4c. Share capital Issued share capital and treasury shares Number of shares As at 1 January ,797,607,004 Issue of shares under share option scheme 4,630,900 Issue of shares under restricted share plan and performance share plan 5,002,319 As at 30 June ,807,240,223 Issue of shares under share option scheme 183,650 Issue of shares under restricted share plan 19,094 As at 30 September ,807,442,967 As at 30 September 2013, the Company is not holding any treasury shares (30 September 2012: Nil). No sales, transfers, disposal, cancellation and/or use of treasury shares took place during the nine months ended 30 September Share options As at 30 September 2013, there were unexercised options for 25,382,115 of unissued ordinary shares (30 September 2012: 31,121,165 ordinary shares) under the KCL Share Options Scheme. Unexercised options for 117,900 of unissued ordinary shares were cancelled in the nine months ended 30 September 2013 (30 September 2012: 138,600). KCL Performance Share Plan ( KCL PSP ) As at 30 September 2013, the number of contingent shares granted but not released were 2,304,755 (30 September 2012: 2,129,314) for KCL PSP. Based on the achievement factor, the actual release of the awards in ordinary shares of the Company could range from zero to a maximum of 3,457,133 under KCL PSP. KCL Restricted Share Plan ( KCL RSP ) As at 30 September 2013, the number of contingent shares granted but not released was 4,393,842 (30 September 2012: 4,125,656). Based on the achievement factor, the actual release of the awards in ordinary shares of the Company could range from zero to a maximum of 4,393,842 under KCL RSP. As at 30 September 2013, the number of awards released but not vested was 4,053,430 (30 September 2012: 3,990,238) for KCL RSP. The movements in the number of shares under KCL RSP and KCL PSP are as follows: Contingent awards: Date of Grant At Contingent awards granted Number of shares Adjustment upon Other release Released Cancelled adjustments At KCL PSP , ,100 (1,092,100) ,000 22, , ,314 26, , ,000 29, ,772 2,129, , ,100 (1,092,100) 78,441 2,304,755 KCL RSP ,103,656 (4,075,068) (28,588) ,300,500 (57,555) 150,897 4,393,842 4,103,656 4,300,500 (4,075,068) (86,143) 150,897 4,393,842 Keppel Corporation Limited, Page 14 of 28

19 4c. Share capital (cont d) Awards released but not vested: Number of shares Date of Grant At Released Vested Cancelled KCL PSP Other adjustments At ,092,100 (1,092,100) KCL RSP 1,092,100 (1,092,100) ,278,035 (1,248,335) (29,700) ,677,411 (1,321,712) (65,224) 45,942 1,336, ,075,068 (1,359,266) (92,622) 93,833 2,717,013 3,955,446 4,075,068 (3,929,313) (187,546) 139,775 4,053,430 4d. Capital reserves Group $'000 $'000 $'000 Company $'000 Share option and share plan reserve 194, , , ,829 Fair value reserve 214, ,724 Hedging reserve (45,615) 220,874 Bonus issue by subsidiaries 40,000 40,000 Others 58,945 50, , , , ,829 Keppel Corporation Limited, Page 15 of 28

20 5. CONSOLIDATED STATEMENT OF CASH FLOWS for the third quarter and nine months ended 30 September Note Third Quarter Nine Months OPERATING ACTIVITIES Operating profit 568, ,576 1,387,954 1,988,222 Adjustments: Depreciation and amortisation 64,846 52, , ,624 Share-based payment expenses 24,966 17,654 40,794 33,120 Profit on sale of fixed assets (1,255) (4,546) (3,538) (4,956) Gain on disposal of subsidiaries (61,087) (16,676) (61,087) (16,676) Write-back of provision for restructuring of operations and others (26,831) Operational cash flow before changes in working capital 595, ,822 1,515,499 2,153,334 Working capital changes: Stocks & work-in-progress (449,183) 147,844 (668,415) (630,176) Debtors 80, ,854 (991,820) (343,731) Creditors 161,231 (197,954) (162,935) (117,177) Investments (16,553) (5,250) (72,889) 233,683 Advances to associated companies (33,912) (190,074) 12,866 (305,290) Translation of foreign subsidiaries 22,975 (32,192) 51,245 (29,448) 360, ,050 (316,449) 961,195 Interest received 43,995 42, , ,229 Interest paid (38,565) (35,580) (117,125) (102,315) Income taxes paid, net of refunds received (198,966) (70,564) (555,884) (239,346) Net cash from/(used in) operating activities 166, ,048 (863,806) 737,763 INVESTING ACTIVITIES Acquisition of subsidiaries and businesses 5a (27,524) (42,539) (71,985) (42,539) Acquisition and further investment in associated companies (199,631) (172,294) (488,074) (337,807) Acquisition of fixed assets and investment properties (399,811) (222,865) (742,421) (641,774) Disposal of subsidiaries 5b (47,458) 28, ,088 28,186 Proceeds from disposal of fixed assets 6,180 9,159 41,619 20,311 Dividends received from investments and associated companies 55,521 42, , ,396 Net cash used in investing activities (612,723) (358,033) (782,791) (850,227) FINANCING ACTIVITIES Acquisition of additional shares in subsidiaries (19,500) (149,286) Proceeds from share issues 1,547 19,408 35,872 76,524 Proceeds from non-controlling shareholders of subsidiaries (7,724) 2,519 57,756 16,962 Proceeds from disposal of interest in a subsidiary without loss of control 5c 135,513 Proceeds from term loans 505, ,555 2,291,490 1,813,335 Repayment of term loans (68,405) (145,026) (523,455) (254,228) Dividend paid to shareholders of the Company (180,735) (323,033) (668,506) (789,456) Dividend paid to non-controlling shareholders of subsidiaries (44,494) (24,658) (171,164) (189,416) Net cash from/(used in) financing activities 205,950 (93,735) 1,157, ,435 Net (decrease)/increase in cash and cash equivalents (239,878) (185,720) (489,091) 411,971 Cash and cash equivalents as at beginning of period 3,865,972 3,536,033 4,055,176 3,020,454 Effects of exchange rate changes on the balance of cash held in foreign currencies 14,123 (73,553) 74,132 (155,665) Cash and cash equivalents as at end of period 5d 3,640,217 3,276,760 3,640,217 3,276,760 Free cash flow (445,828) (91,985) (1,646,597) (112,464) Keppel Corporation Limited, Page 16 of 28

21 NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS Third Quarter Nine Months 5a. Acquisition of subsidiaries and businesses During the financial period, the fair values of net assets of subsidiaries and businesses acquired were as follows: Fixed assets 4 109, ,998 Investment properties 133, ,931 Properties held for sale 324, ,952 Stocks & work-in-progress 79,540 79,540 Debtors 942 1,357 1,017 1,536 Bank balances and cash 6 32,767 3,043 33,059 Shareholders' loans (120,911) (27,920) (122,911) (27,920) Creditors (103,955) (4,683) (176,759) Bank borrowings (38,000) Current and deferred taxation (50,595) (19,342) (51,472) (134,570) Total identifiable net assets at fair value 154,398 72, , ,815 Non-controlling interest measured at noncontrolling interests' proportionate share of the net assets (37,457) (224,799) Amount previously accounted for as associated companies (10,546) (45,498) (10,546) Net assets acquired 154,398 24, , ,470 Assumption of shareholders' loans 120,911 27, ,911 27,920 Goodwill arising from acquisition 23,138 23,138 Total purchase consideration 275,309 75, , ,528 Less: Advance payment made in prior year (207,930) Less: Deferred payments (247,779) (247,779) Less: Bank balances and cash acquired (6) (32,767) (3,043) (33,059) Cash flow on acquisition 27,524 42,539 71,985 42,539 Significant acquisitions during the nine months of the year include the acquisition of remaining 50% interest in Parksville and 100% interest in Shanghai Jinju Real Estate Development Co. Ltd ( Shanghai Jinju ), which owns a residential site in Sheshan, Songjiang District in Shanghai for development of landed homes. For the nine months in the prior year, the Group acquired an interest in Aether Pte Ltd, which indirectly owns 51% interest in Beijing Aether Property Development Ltd. The Group also acquired additional 36% interest in Kingsdale Group. Prior to the acquisition, the Group owns 50% of the total issued share capital of Kingsdale. Keppel Corporation Limited, Page 17 of 28

22 Third Quarter Nine Months 5b. Disposal of subsidiaries During the financial period, the book values of net assets of subsidiaries disposed were as follows: Fixed assets (87) (21,541) (87) (21,541) Investment properties (3,757,083) (3,757,083) Investment in associated company (1,941,645) (1,941,645) Intangible assets (15,549) (15,549) Stocks & work-in-progress (16,776) (16,776) Debtors and other assets (270,279) (8,316) (270,279) (8,316) Bank balances and cash (60,503) (1,277) (60,503) (1,277) Creditors and other liabilities 99,436 1,629 99,436 1,629 Borrowings 2,424,159 2,424,159 Current and deferred taxation 14,248 14,248 Non-controlling interests deconsolidated 882,677 14, ,677 14,809 (2,624,626) (31,472) (2,624,626) (31,472) Amount accounted for as associated company 1,407,821 20,960 1,407,821 20,960 Amount accounted for as amount owing from associated company 222, ,651 Distribution of dividend in specie 688, ,018 Net assets disposed of (306,136) (10,512) (306,136) (10,512) Net profit on disposal (61,087) (16,676) (61,087) (16,676) Realisation of foreign currency translation reserve and capital reserve (21,368) (2,275) (21,368) (2,275) Sale proceeds (388,591) (29,463) (388,591) (29,463) Less: Bank balances and cash disposed 60,503 1,277 60,503 1,277 Less: Proceeds received in first half of the year from partial disposal of interest 375,546 Cash flow on disposal 47,458 (28,186) (328,088) (28,186) Significant disposals during the nine months of the year include the divestment of a subsidiary, Montfort Development Pte Ltd, which has a 50% interest in Hotel Sedona Manado in Indonesia and the deconsolidation of Keppel REIT due to loss of control. In the prior year, the Group completed the divestment of its partial interest in Saigon Centre Phase 2. 5c. Disposal of interest in a subsidiary without loss of control During the nine months, the Group disposed of its 30% interest in its subsidiary, Sherwood Development Pte Ltd to Wkdeveloper Sig I Private Limited, a wholly-owned subsidiary company of Vanke Property (Hong Kong) Company Limited. There was no gain or loss arising from this disposal as the 30% interest was sold at its net carrying value. 5d. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and balances with banks. Cash and cash equivalents in the consolidated statement of cash flows comprise the following balance sheet amounts: Third Quarter Nine Months Bank balances, deposits and cash 3,640,692 3,299,641 3,640,692 3,299,641 Bank overdrafts (475) (22,881) (475) (22,881) 3,640,217 3,276,760 3,640,217 3,276,760 Keppel Corporation Limited, Page 18 of 28

23 5e. Cash flow analysis (i) Third Quarter Net cash from operating activities for the quarter was $167 million compared to that of $266 million for the corresponding quarter last year. This was due mainly to higher operational cash outflow. Net cash used in investment activities for the quarter was $613 million. The Group spent $627 million on acquisitions and operational capex. This comprised mainly acquisition of additional interest in associated company (KrisEnergy), capital expenditure for the expansion of Keppel Merlimau Cogen power plant, acquisition of interest in a subsidiary, Shanghai Jinju, and other operational capex. Divestment and dividend income totalled $14 million. Free cash flow was negative $446 million for the quarter compared to negative $92 million for the corresponding quarter last year. (ii) Nine Months Net cash used in operating activities for the nine months was $864 million compared to net cash from operating activities of $738 million for the corresponding period last year. This was mainly due to lower operational cash inflow and higher cash outflow from working capital requirements. Net cash used in investment activities for the nine months was $783 million. The Group spent $1,303 million on acquisitions and operational capex. This comprised principally acquisition of an associated company, Equity Rainbow, further investment in associated companies, capital expenditure for the expansion of Keppel Merlimau Cogen power plant, acquisition of interest in Shanghai Jinju, acquisition of an industrial building by Infrastructure Division for development of a new data centre and other operational capex. Divestment and dividend income totalled $520 million, mainly due to the deconsolidation of Keppel REIT. Free cash flow for the nine months was negative $1,647 million compared to negative $112 million for the corresponding period last year. 6. AUDIT The financial statements have not been audited nor reviewed by our auditors. 7. AUDITORS' REPORT Not applicable 8. ACCOUNTING POLICIES Except as disclosed in paragraph 9 below, the Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period compared with those of the audited financial statements as at 31 December Keppel Corporation Limited, Page 19 of 28

24 9. CHANGES IN THE ACCOUNTING POLICIES The Group adopted the new/revised FRS that are effective for annual periods beginning on or after 1 January Changes to the Group s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS. The following are the new or amended FRS that are relevant to the Group: Amendments to FRS 1 Presentation of Items of Other Comprehensive Income Revised FRS 19 Employee Benefits FRS 113 Fair Value Measurement Amendments to FRS 107 Disclosures - Offsetting Financial Assets and Financial Liabilities Improvements to FRSs Amendments to FRS 1 Presentation of Financial Statements - Amendments to FRS 16 Property, Plant and Equipment - Amendments to FRS 32 Financial Instruments: Presentation The adoption of the above amended FRS did not have any significant impact on the financial statements of the Group, except for the following: Amendments to FRS 1 Presentation of Items of Other Comprehensive Income The Amendments to FRS 1 change the grouping of items presented in other comprehensive income. Items that can be reclassified to profit or loss at a future point in time will be presented separately from items which will never be reclassified. As the amendments only affect the presentations of items that are already recognised in other comprehensive income, there is no impact on the Group s financial position and financial performance upon adoption of these amendments. FRS 113 Fair Value Measurements FRS 113 provides a single source of guidance for all fair value measurements. FRS 113 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under FRS when fair value is required or permitted by FRS. The Group s policy is to revalue its investment properties on an annual basis. Keppel Corporation Limited, Page 20 of 28

25 10. REVIEW OF GROUP PERFORMANCE (i) Third Quarter The Group revenue for 3Q2013 of $2,947 million was $272 million below that of 3Q2012. Revenue from Offshore & Marine Division dropped by 31% to $1,535 million due to lower volume of work. Arising from higher revenue contribution from the co-generation power plant in Singapore partially softened by lower revenue from the Engineering, Procurement and Construction (EPC) contracts, Infrastructure Division revenue increased by 29% to $877 million. Property Division revenue rose by $226 million to $532 million mainly from more homes sold in China during the third quarter in 2013 compared to the corresponding quarter in Third quarter Group pre-tax profit grew by 34% or $171 million from $498 million to $669 million. Offshore & Marine Division show a decrease in profit of $35 million from $317 million to $282 million because of the lower revenue. Infrastructure Division posted a higher profit of $48 million in 2013 compared to $27 million in 2012 from higher profit of the power and gas business. Profit from Property Division more than doubled from $142 million to $315 million mainly due to the improvement in China sales. After taking into account income tax expenses and non-controlling interests, net profit attributable to shareholders for 3Q2013 was $458 million, 32% above the same quarter in the previous year. Earnings per share increased by the same rate to 25.3 cents. (ii) Nine Months Group net profit for the nine months ended 30 September 2013 was $1,161 million compared to $1,618 million for the same period in Earnings per share decreased by 29% to 64.3 cents. Annualised return on equity was 16.3% and Economic Value Added declined by $526 million to $736 million. Group revenue of $8,782 million for the nine months to-date is 20% below that of the same nine months in A drop in volume of work in Offshore & Marine Division resulted in its revenue going down by $1,196 million to $5,055 million. Major jobs completed in the nine months include 16 jack-ups, a semi-submersible and a drillship upgrade. Infrastructure Division revenue picked up by 17% to $2,484 million due to revenue growth from the co-generation power plant in Singapore partly offset by fall in revenue from EPC contracts. Revenue from Property Division contracted from $2,459 million to $1,230 million mainly from decline in sales of Reflections at Keppel Bay units arising from the deliveries of residential units sold under the deferred payment scheme in the comparative period in 2012 which will not be repeated in At the pre-tax level, Group profit weakened by 22% to $1,685 million from that of the corresponding period in Offshore & Marine Division reported a lower pre-tax profit of $854 million caused mainly by the dip in revenue. Infrastructure Division profit improved by $66 million to $169 million due mainly to profit up lift from the power and gas business, including the reversal of provision following the finalisation of the sale of the power barge, partially offset by losses from the EPC contracts. Profit from Property Division of $603 million was 38% lower. In 2012, Reflections at Keppel Bay recognised a higher level of profits as it benefited from revenue recognition from the deliveries of residential units sold under the deferred payment scheme. Profit from Investments decreased mainly due to disposal of investments in the prior period which is absent in Taking into account income tax expenses and non-controlling interests, net profit attributable to shareholders was $1,161 million. Offshore & Marine Division was the largest contributor to Group net profit with 57% share, followed by Property Division with 29% share and Infrastructure Division with 11% share. Keppel Corporation Limited, Page 21 of 28

26 11. VARIANCE FROM FORECAST STATEMENT No forecast was previously provided. 12. PROSPECTS Offshore & Marine Division secured $4.8 billion of orders in the first three quarters of the year bringing its net order book to a record level of $13.6 billion with deliveries extending into The Division continues to see good prospects for the Offshore & Marine industry arising from healthy rig demand. In the Infrastructure Division, Keppel Infrastructure will continue to grow its power and gas, environmental and energy efficiency businesses. Completion of the Keppel Merlimau Cogen power plant expansion positioned Keppel Infrastructure well to grow its domestic energy business. At the same time, it endeavours to complete its ongoing EPC projects efficiently. Keppel Telecommunications & Transportation continues to grow both its logistics businesses and data centres portfolio. For the nine months ended 30 September 2013, the Property Division sold about 310 residential units in Singapore. About half of these are from the launch of Corals at Keppel Bay. Grade A office market remains stable. Marina Bay Financial Center Tower 3 is about 91% committed as at end-september In China, the Division sold about 3,070 residential units during the nine months, trebled that sold over the same period in The fund management business continues to grow with total assets under management by Keppel REIT and Alpha as at end- September 2013 increasing to $17.3 billion as compared to $15.3 billion as at end The Division intends to scale up in Singapore and China while strengthening its position in Vietnam and Indonesia. At the same time, it will expand its overseas commercial portfolio and grow its fund management business. Amidst the uncertain global economy and moderate growth forecast in emerging economies, the Group will continue to focus on project execution, on time deliveries and enhancing our engineering designs and capabilities. Keppel Corporation Limited, Page 22 of 28

27 13. DIVIDEND 13a. Current Financial Period Reported On Any dividend recommended for the current financial period reported on? No 13b. Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? No 13c. Date Payable Not applicable 13d. Books Closure Date Not applicable 13e. If no dividend has been declared/recommended, a statement to that effect. No dividend is declared for the quarter ended 30 September Total distribution to shareholders in 2013 amounted to 75.1 cents per share. In respect of the year ended 31 December 2012, a tax exempt one-tier final dividend of 27.0 cents per share was paid on 8 May 2013 and a special dividend in specie of one (1) Keppel REIT unit for every five (5) shares in the Company, equivalent to 28.6 cents per share, was distributed on 8 May For the half year ended 30 June 2013, a tax exempt one-tier interim dividend of 10.0 cents per share was paid on 7 August 2013 and a special dividend in specie of eight (8) Keppel REIT units for every one hundred (100) shares in the Company, equivalent to 9.5 cents per share, was distributed on 13 September Keppel Corporation Limited, Page 23 of 28

28 14. SEGMENT ANALYSIS Nine months ended 30 September 2013 Offshore & Marine Infrastructure Property Investments Elimination Total Revenue External sales 5,055,104 2,484,051 1,229,753 12,931 8,781,839 Inter-segment sales 3,585 69,816 59,581 55,663 (188,645) Total 5,058,689 2,553,867 1,289,334 68,594 (188,645) 8,781,839 Segment Results Operating profit 749, , ,421 14,838 6,835 1,387,954 Investment income 1,069 10,985 12,054 Interest income 55,569 1,070 61, ,241 (100,747) 125,652 Interest expenses (9,858) (15,861) (79,481) (105,837) 93,912 (117,125) Share of results of associated companies 57,439 24, ,799 41, ,299 Profit before tax 853, , ,243 59,208 1,684,834 Taxation (169,813) (36,057) (71,275) (17,642) (294,787) Profit for the period 683, , ,968 41,566 1,390,047 Attributable to: Shareholders of Company 660, , ,426 36,917 1,161,394 Non-controlling interests 23,545 8, ,542 4, , , , ,968 41,566 1,390,047 Other Information Segment assets 7,900,942 3,652,995 15,200,752 6,954,136 (5,179,961) 28,528,864 Segment liabilities 5,812,791 2,741,417 7,506,342 5,029,420 (5,179,961) 15,910,009 Net assets 2,088, ,578 7,694,410 1,924,716 12,618,855 Investment in associated companies 492, ,996 3,618, ,910 5,276,026 Additions to non-current assets 266, , , ,604 1,230,495 Depreciation and amortisation 102,339 56,072 19, ,207 Geographical Information Singapore Far East & Other ASEAN Countries Americas Other Countries Elimination Total External sales 6,668, , , ,182 8,781,839 Non-current assets 7,615,133 2,723, , ,893 10,977,184 Keppel Corporation Limited, Page 24 of 28

29 Nine months ended 30 September 2012 Offshore & Marine Infrastructure Property Investments Elimination Total Revenue External sales 6,251,409 2,117,471 2,458, ,708 10,966,101 Inter-segment sales ,686 47,617 44,958 (238,703) Total 6,251,851 2,263,157 2,506, ,666 (238,703) 10,966,101 Segment Results Operating profit 856,988 94, , ,252 (9,636) 1,988,222 Investment income 1,596 1, ,462 Interest income 59,414 1,567 54,562 80,804 (78,118) 118,229 Interest expenses (6,786) (12,378) (95,559) (75,346) 87,754 (102,315) Share of results of associated companies 29,060 19,208 89,550 27, ,954 Profit before tax 940, , , ,948 2,172,552 Taxation (195,225) (22,596) (145,906) 18,968 (344,759) Profit for the period 745,047 80, , ,916 1,827,793 Attributable to: Shareholders of Company 725,277 71, , ,080 1,618,120 Non-controlling interests 19,770 9, , , ,047 80, , ,916 1,827,793 Other Information Segment assets 7,474,598 3,162,665 16,807,495 6,083,878 (6,428,032) 27,100,604 Segment liabilities 5,204,535 2,300,516 9,329,619 3,984,238 (6,428,032) 14,390,876 Net assets 2,270, ,149 7,477,876 2,099,640 12,709,728 Investment in associated companies 387, ,400 3,501, ,824 4,802,614 Additions to non-current assets 232, , , , ,581 Depreciation and amortisation 99,840 41,148 12, ,624 Geographical Information Singapore Far East & Other ASEAN Countries Americas Other Countries Elimination Total External sales 8,952, , , ,590 10,966,101 Non-current assets 10,176,471 2,226, , ,007 13,345,576 Note: (a) The Group is organised into business units based on their products and services, and has four reportable operating segments: Offshore & Marine, Infrastructure, Property and Investments. The Investments Division consists mainly of the Group's investments in k1 Ventures Ltd, M1 Limited and equities. (b) Pricing of inter-segment goods and services is at fair market value. (c) Other than Singapore, no single country accounted for 10% or more of the Group s revenue for the nine months ended 30 September 2013 and Keppel Corporation Limited, Page 25 of 28

30 15. REVIEW OF SEGMENT PERFORMANCE 15a. Revenue by Segments Group revenue of $8,782 million was $2,184 million or 20% below that of corresponding period in Revenue from Offshore & Marine Division of $5,055 million was $1,196 million or 19% lower due to decline in volume of work. Revenue from Infrastructure Division of $2,484 million was $367 million or 17% higher due mainly to higher revenue generated by the co-generation power plant in Singapore. Revenue from Property Division of $1,230 million fell by $1,229 million or 50% due largely to drop in revenue recognition from sales of Reflections at Keppel Bay units as a result of the delivery of residential units sold under the deferred payment scheme in the comparative period in b. Net profit by Segments Group net profit of $1,161 million was $457 million or 28% lower than that of corresponding period in Profit from Offshore & Marine Division of $660 million was $65 million or 9% lower while that from Infrastructure Division of $124 million was $52 million or 74% higher. Contribution from Infrastructure Division included the reversal of provision following the finalisation of the sales of the power barge. Profit from Property Division of $340 million declined by $299 million or 47% due largely to reduced contribution from Reflections at Keppel Bay. Profit from Investments decreased due to prior period s profit on disposal of investments. Offshore & Marine Division was the largest contributor to Group net profit with 57% share, followed by Property Division with 29% share and Infrastructure Division with 11% share. 15c. Revenue by Geographical Segments Revenue from Singapore of $6,669 million was $2,283 million lower, due largely to lower revenue recognition from Reflections at Keppel Bay. Higher revenue from Far East & Other ASEAN Countries mainly came from the Property Division due to property trading in China, partly offset by lower revenue from Offshore and Marine Division due to lower volume of work. Higher revenue from Americas mainly arose from the Offshore & Marine Division. Keppel Corporation Limited, Page 26 of 28

31 16. INTERESTED PERSON TRANSACTIONS The Group has obtained a general mandate from shareholders of the Company for interested person transactions in the Annual General Meeting held on 19 April During the financial period, the following interested person transactions were entered into by the Group: Name of Interested Person Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders' mandate pursuant to Rule 920) Nine months Nine months Aggregate value of all interested person transactions conducted under a shareholders' mandate pursuant to Rule 920 of the SGX Listing Manual. (excluding transactions less than $100,000) Nine months Nine months Transaction for the Sale of Goods and Services CapitaLand Group 5,400 4,700 CapitaMalls Asia Group 337,000 Integradora de Servicios Petroleros Oro Negro 3,969 Mapletree Investments Group 3,600 MediaCorp Group 71,500 Neptune Orient Lines Group ,676 PSA International Group 9, SATS Group 7,712 28,980 SembCorp Marine Group 1,331 6,556 Singapore Airlines Group 7,763 Singapore Power Group 1,644 12,834 Singapore Technologies Engineering Group 1, Singapore Telecommunications Group 4,440 Temasek Holdings Group 1,527 Transaction for the Purchase of Goods and Services CapitaMalls Asia Group 344 Certis CISCO Security Group Gas Supply Pte Ltd 90, ,000 Hazeltree Holdings Group 108 Mapletree Investments Group 21, MediaCorp Group 221 PSA International Group SembCorp Marine Group Singapore Power Group 240 Singapore Technologies Engineering Group 7, Total Interested Person Transactions 154, ,749 BY ORDER OF THE BOARD CAROLINE CHANG/KENNY LEE Company Secretaries 17 October 2013 Keppel Corporation Limited, Page 27 of 28

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