January 2008 - Keppel Corporation

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10 Business Evergro to realise full potential of Tianjin projects In 2007, the Evergro Group’s turnover grew 591.2% from $5.8 million in 2006 to $39.7 million. This year, the Group recognised revenue from the sale of residential developments in Changzhou Fushi and Tianjin Fushi totalling $34.1 million, with the balance from golf course operations. At the gross profit level, Changzhou contributed $3.5 million and the golf course operations contributed $3.6 million. The Group’s gross profit was reduced by a loss of $4.2 million from residential sales in Tianjin. In order to realise the full potential of the Group’s Tianjin projects, higher costs were also incurred to upgrade the present development and supporting infrastructure. Group gross profit was $2.9 million or $0.4 million lower than that for 2006. Other operating income of $8.9 million was due mainly to a reinvestment tax rebate obtained in Changzhou and other tax incentives totalling $5.4 million, and a $3.2 million gain from the disposal of a land parcel in Changzhou. In 2006, other operating income comprised mainly the receipt of the full and final settlement of $1.4 million of a long outstanding debt in Shenyang. Administrative and other expenses in 2007 were higher than in 2006 by $3.5 million. The commencement of land use tax in China in 2007 cost the Group $2.2 million. With the start of sales activities for the Tianjin and Changzhou projects, advertising and promotional expenses increased by $0.9 million. The remaining increase is due to higher depreciation charges for golf course assets. As a result, the Group suffered an operating loss of $3.8 million in 2007, which is $5.5 million lower than that for 2006. In 2007, the Group recognised divestment gains on the sale of its 10% stake in Tianjin Tianfu Property Development Co. and a 50% share in Jiangyin Yangtze Dragon Development Co. totalling $8.2 million. With these divestment gains, the Group reported a pre-tax profit of $4.4 million. The higher profit in 2006 is due to the gain on the sale of a 90% stake in Tianjin Tianfu Property Development Co. The Group provided for a taxation of $4.2 million on the divestment gains and the gain from the sale of the Changzhou land. In all, the Group after tax profit was $0.2 million versus $7.5 million in 2006. The Group’s residential project in Changzhou is targeted for completion this year. Riding on the city’s rapid development, Evergro will continue to seek new opportunities. The residential project in Jiangyin is slated for launch in the first half of 2008 through an initial phase of about 150 apartment units, with more to be progressively launched in the second half of the year. A recent significant development is the announcement of Tianjin as the proposed site for Eco-city, a Sino-Singapore joint project to be launched in 2008. The Group will focus its attention on realising the potential value of its Tianjin projects, including the subsequent residential development phases and golf course. A series of macroeconomic control measures to cool investments in the real estate sector were introduced in PRC in 2006 and 2007. Going forward, the Chinese government is expected to introduce additional measures, in particular in credit tightening, financing of real estate projects and control of foreign investments. 2008 will also see greater attention on land hoarding, and measures for developers to quicken development. Overall, property prices may see some correction in cities that have experienced overly rapid price appreciation in 2007. They will, however, remain stable and increase steadily in the second-tier cities, given the strong demand. keppelite Keppelite I January 2008
Business 11 Developing skills for the industry Getting great people assures the success of any company and the Keppel O&M Group makes it a priority to develop their relevant skills even before they join the company! On 16 January, Keppel O&M in collaboration with the Institute of Technical Education (ITE) launched the Higher National ITE Certificate (Higher Nitec) in Marine and Offshore Engineering course. The course will equip students with the relevant trade skills who will meet the critical need for supervisors in the offshore and marine industry. This industry has seen meteoric growth, with a 2006 record output of over S$12 billion, a 38 per cent growth from 2005. A manpower survey conducted by the Association of Singapore Marine Industries (ASMI) in October 2006 predicted that there would be a demand for about 120 local supervisors per year over the next five years. At the launch, the ITE Board of Governors engaged Keppel O&M’s senior management in discussion on the Group’s business. They also took the opportunity to visit one of Keppel O&M’s yards where the launch was held. Mr Choo Chiau Beng, Chairman & CEO of Keppel Mr Choo (right) welcomes Mr Bob Tan, Chairman of ITE to Keppel O&M O&M said, “As a leader in our industry, Keppel O&M is glad to provide a glance into our industry for these academic institutions. We want to inspire talents with the right set of skills, knowledge and mindset to join us.” keppelite Visits to Keppel’s yards Delegates from North Carolina on a yard tour led by Deputy Shipyard Manager, Low Tiau Tong (third from right) Keppel O&M not only has a diverse group of employees working for the company, this diversity is also seen in the delegations of visitors that come to the Keppel yards in Singapore. Eager to learn the organisation and operations of Keppel’s yard, Scandinavian fund managers and analysts from the Arctic Securities in Norway met with Keppel O&M management for an interactive discussion on 8 January. Just over a week later, a group of educational policy makers and business leaders from North Carolina’s Center for International Understanding and the Public School Forum also called on Keppel O&M to get a close-up view of the yard’s operations and facilities. keppelite Keppelite I January 2008
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Page 3 and 4: Editorial Turning vision to reality
Page 5 and 6: Business 5 About 44.5% and 21.9% of
Page 7 and 8: Business 7 Meeting the expectation
Page 9: Business 9 Lessons on taking it glo
Page 13 and 14: Team 13 Chairman Lim appointed Pres
Page 15 and 16: Team 15 Learning from the region Th
Page 17 and 18: 17 Ms Wang Look Fung, Keppel Group
Page 19 and 20: 19 Turning vision into reality - Se
Page 21 and 22: 21 Marina at Keppel Bay will enhanc
Page 23 and 24: Onboard Uniquely Singapore Team 23
Page 29 and 30: Team 29 Mrs Eileen Choo (first from
Page 31 and 32: Team 31 This marked the end of a su
Page 33 and 34: Community 33 People 33 Rewarding ex
Page 35 and 36: Community 35 volunteers Keppel Gree

January 2008 - Keppel Corporation

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