Keppel Corp's net profit dipped 5.1% to $338.7m

But revenue was up 8.6%.

According to OCBC Investment Research, Keppel Corporation (KEP) reported a 8.6% YoY rise in revenue to S$3b and a 5.1% fall in net profit to S$338.7m in 1Q14, both accounting for about 22% of its full year estimates and in line with expectations.

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Excluding one-off gains from the reversal of provision from the sale of a power barge and write-back of tax provision made by Keppel Land in 1Q13, net profit in 1Q14 was largely in line with that in 1Q13.

Operations were mostly on track

The O&M segment saw operating margins of 14.6% in 1Q14, or about 14.2% excluding the sale of Berich Enterprises and Keppel Kazakhstan. This is close to the 14.1% margin seen in 1Q13. We also understand that the first and second semi-submersible rigs for Sete Brasil have also reached 60% and 20% revenue recognition, respectively.

The lower hull of the first semi has arrived in Angra, Brazil, and construction is “progressing well” for the second and third semis. On the infrastructure side, Keppel Seghers has completed the first burn as part of the commissioning process for Phase 1 of the Greater Manchester Energy-from-Waste plant. As for the challenging Qatar project, no provisions were made in 1Q14 and management hopes for completion by year end.