Did Keppel Corp flunk its 1Q12 report card?

It's tricky to tell with earnings jumping 141% to S$751 million yoy but mainly due to accounting changes.

The property developer has revised how it recognises revenues, according to Mr Choo Chiau Beng, Chief Executive Officer, Keppel Corp: "For the first quarter of this year, Keppel Corporation has turned in a better performance than the corresponding period last year. Net profit for 1Q2012 was $751 million, a 141% increase over the same quarter last year. The lumpy performance in this first quarter is primarily because we started recognising earnings from homes sold under the deferred payment scheme at Reflections at Keppel Bay. Due to accounting changes, the profits are now recognised only upon project completion. Our annualised ROE remains healthy at 21.6% and we achieved EVA of $654 million."

For the rest of the year, Mr Choo said Keppel Corp will raising value from its existing Offshore & Marine order pipeline, and raising productivity in its subsidiaries, as well as expand its portfolio of quality assets under Keppel Land.

"In Offshore & Marine, we will work hard to execute our orderbook well to ensure that we meet our customers' requirements safely, on time and on budget. No effort will be spared to further improve productivity and maximise efficiency to extract good value from each project," he said.

"Technology continues to play an increasingly important role in the industry. Augmenting our proprietary semisubmersible designs, we have also developed two new designs DSS51HE and DSS60HE to meet the needs of drilling in deeper waters and harsher environments. In redoubling efforts to enhance technology development, we have restructured and elevated the Keppel Offshore & Marine Technology Centre (KOMtech) to become the Technology Division of Keppel Offshore & Marine. This Division will be responsible for R&D, product development and commercialisation as well as Process Technology aimed at improving productivity in all our yards," he added.

"In our Infrastructure Division, Keppel Energy will continue to grow its share of the Singapore power market as it enhances its position as an integrated platform in the power and gas business. KIE will focus on executing its EPC projects in Qatar and the UK while it continues to scan for projects in its key markets. Keppel T&T will work to complete its current logistics expansion projects in China in Wuhu and the Sino-Singapore Jilin Food Zone well and on schedule, so that it is well positioned to capture value from growing local demand for integrated port logistics and cold-chain logistics services," he said.

"In property, Keppel Land will continue to seek out and selectively acquire quality sites in Singapore and overseas for both residential and commercial developments. We have again appointed Daniel Libeskind to design Plot 3 of Keppel Bay and will time the launch according to market conditions. We will also continue to grow our fee-based property fund management business, scanning for good opportunities to enhance our portfolio of quality assets," he said further.