Keppel T&T's net profit inched 2.9% higher to $15.4m

Still failed to meet analyst's forecast.

According to CIMB, Keppel T&T's net profit was up 2.9% yoy to S$15.4m. However, CIMB noted that this was slightly below expectations, at 22% of its full-year forecast.

Here's more:

This was due to higher-than-expected costs associated with its newly-acquired subsidiaries, which negated the effects of stronger revenues. 

1Q14 revenue rose 22% yoy. Operating expenses increased 26% yoy, mainly due to the three new logistics subsidiaries it acquired during the quarter which are still in their initial startup phase and thus incur higher costs. 

The higher expenses were also attributable to the construction of three new logistics parks in China and Keppel Datahub 2 (KHD2). Consequently, operating profit was only up 4.7% yoy, while net profit rose 2.9% yoy. 

Margin pressure. Operating margin contracted to 15.2% (1Q13: 17.7%) while net margin fell to 31.7% (1Q13: 37.5%). We expect margin pressure to persist through FY14, given that there are still several projects undergoing construction and will only be completed at end-2014 or early 2015.