Keppel T&T's net profit crashes 32% to $21.9m

Lower contribution from its data centre division hurt its earnings.

Keppel Telecommunications & Transportation reported a dismal quarterly profit in Q2, down 32% to $21.9m.

According to the group's announcement, this is due to the lower contribution from the data centre division arising from the disposal of subsidiaries. More so, the group's logistics arm performed poorly during the said quarter.

The group also announced that their second quarter revenue fell 5% down to $47.6m. Its operating profit went 71% down to $2.4m, due largely to the absence of contributions from disposed subsidiaries, higher start-up expenses and manpower employed to support new developments in the data centre business and lower contribution from logistics operations.

Check out the group's prospect for the coming quarters below:

In the Logistics Division, volumes and margins remain under severe pressure with the challenging market outlook. The Division continues to focus on building complementary capabilities to capitalise on the growing e-commerce sector. Following the acquisition of Courex in October last year, the Division is undergoing a transformational journey to tap on Courex’s last mile fulfilment to grow its urban logistics business and has recently launched its omni channel management solution with a Fast Moving Consumer Goods (FMCG) customer. At the same time, the Division remains focused on rightsizing its operations and improving cost efficiencies to address the difficult market conditions in the contract logistics segment. In the Data Centre Division, Keppel

DC Singapore 4 has obtained full Temporary Occupation Permit (TOP) and commenced operations. Pipeline of enquiries remains healthy from existing and potential new clients. The Division is partnering with several government agencies and technology partners to explore innovations in cognitive and green data centre solutions for land scarce Singapore in a tropical climate. In collaboration with the Alpha Data Centre Fund, the Division will continue to pursue new asset development and acquisition opportunities to expand its footprint in its target markets, while at the same time, grow its service fee income.

The Group will continue to seek opportunities for strategic investments in value accretive assets and explore opportunities to unlock value and recycle capital.