Keppel sinks into loss on hefty fine

SINGAPORE: Singaporean conglomerate Keppel Corp swung to its first quarterly net loss in 14 years, after accounting for a huge fine its rig-building unit agreed to pay to resolve investigations into charges it bribed Brazilian officials.

Keppel, last month, said its offshore rigbuilding business had agreed to pay more than US$422 million to resolve the bribery probe brought against it by authorities in the United States, Brazil and Singapore. Investigations with respect to the individuals involved are ongoing.

The company, whose businesses range from rig-building to property development, reported a net loss of S$495 million for the fourth quarter ended December, compared with a net profit of S$143 million in the yearago period.

This marks the company’s first such loss since it started reporting quarterly numbers in 2003.

Excluding the one-off bribery fine and related costs of S$619 million, it would have reported a profit of S$124 million.

The company’s annual profit fell to S$217 million. Excluding the one-off charges, the annual profit would have been S$836 million. According to Thomson Reuters data, the average estimate from six analysts was S$709 million.

Keppel, which had promised to protect dividends from the fine, proposed a final dividend of 14 Singapore cents a share, versus its 2016 final dividend of 12 Singapore cents.

The property division, Keppel’s biggest income contributor, posted a profit of S$287 million, a rise of 7%. Its offshore and marine (O&M) division posted a quarterly loss of S$836 million, versus a loss S$138 million a year ago.