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Keppel T&T's 3Q earnings more than quadruple to $69.9 mil; announces $4.6 mil logistics acquisition By Jude Chan
SINGAPORE (Oct 19): Keppel Telecommunications & Transportation has posted earnings of $69.9 million for 3Q16, an increase of 356.5% compared to earnings of $15.3 million in the same period last year.
Keppel T&T says in a SGX filing on Wednesday that this was mainly due to
higher contribution from its data centre division which saw a one-time gain on disposal of 50% interest in a subsidiary in July, as well as fair value gain on the 50% retained interest.
In addition, Keppel T&T saw upwards adjustment to gains from the two data centres disposed in December 2014.
Revenue fell 8.7% to $46.5 million for 3Q, from $50.9 million in the same quarter last year, mainly due to lower revenue from Keppel T&T’s logistics division.
Year to date, Keppel T&T’s
logistics division saw revenue decrease by $10.0 million to $106.1 million for 9M16, mainly due to lower warehousing and port operations revenue.
Its data centre division saw revenue of $38.9 million for 9M16, $7.0 million higher than the same period last year, due largely to higher co-location service income in Keppel DC Singapore 3 and Keppel Almere.
Keppel T&T’s investments division saw profit before taxation of $22.9 million, $5.9 million lower compared to the same period last year. This was mainly due to lower contribution from associated companies and lower dilution gain on investment in associated companies.
“With few signs of recovery in trade and manufacturing across Asia, the operating environment for
logistics remained challenging,” Keppel T&T says. “Going forward, the Division is looking at expanding its capabilities to provide more value-added services to customers, tapping on the key growth trends in Asia Pacific.
In line with this, Keppel T&T on Wednesday also announced that its wholly-owned subsidiary, Keppel Logistics, is investing up to $4.6 million to acquire a 59.6% stake in e-commerce logistics service provider Courex, including funding for expansion.
Keppel Logistics will pay $758,326 to acquire Lee Kok Tong’s entire interest in Courex, comprising 60,200 ordinary shares representing 59.6% of the issued and paid up capital of the company.
In addition, Keppel Logistics will extend a convertible loan of up to $3.84 million to Courex for the purpose of repaying outstanding loans owing to Lee Kok Tong and as working capital.
Keppel T&T says the investment will be funded by shareholder funds.
“We are seeing rapid growth in the e-commerce space, in turn driving rapid changes in the logistics sector,” says Keppel T&T CEO Thomas Pang.
“Our investment in Courex is part of Keppel T&T’s strategy to strengthen our position as a leading third-party logistics player in Singapore, and to equip us with additional capabilities so that we may tap the growth of the burgeoning e-commerce sector in Singapore and Southeast Asia,” Pang adds.
Courex founder Joe Choa Soon Heng, who holds the remaining 40.4% interest in Courex, will continue to lead the company post-acquisition.
Keppel T&T closed 1.9% lower at $1.80 on Wednesday.
Source: The Edge
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