Breaking the Arctic ice - Keppel Corporation

12 Business
...continued from page 11.
Keppel O&M’s network of yards, including the Keppel AmFELS yard in Brownville seen here, are well-positioned to serve the niche target markets and leverage group synergy
currencies. The foreign
currency that we already
have on hand is compared
against the present market
price. This foreign exchange
loss will be written back to
the project rates when we
eventually pay for the
equipment when delivered.
ON FAIR VALUE
TSH: There are two parts to
the question. First is on the
fair value change or
available assets for sale of
$66 million. We hold a
portfolio of investments and
over the years, we still have
surplus from these assets
held for sale. We look at the
market prices prevailing at
any point in time and our
Keppelite I November 2008
reserve number, which is
the surplus number, will be
adjusted from quarter to
quarter. For this particular
quarter, we have seen
reduction from the reserve
of $66 million.
The second part is a fair
value loss on cashflow
hedge of $192 million. For
our O&M business, we have
this approach of hedging
our contracts forward. What
we have done is to ensure
that we would cover
whatever is the balance
foreign exchange after
expenditure and hedge this
forward. This is a cashflow
hedging cost we have to
take into our capital reserve
every quarter and this
particular quarter, it is a
$192 million movement.
ON OPPORTUNITIES
LCO: Every dark cloud has a
silver lining. It is also true in
times of crisis. The better
managed and stronger
companies invariably should
come off better. We would
like to think that Keppel is
able to capitalise on the
opportunities that recovery
will bring. Generally, it will be
within the ambit of our core
businesses, apart from our
increasing scope and span of
operations geographically.
We will look at possible
adjacent businesses of our
core competencies. keppelite
LCO – Mr Lim Chee Onn,
Executive Chairman of Keppel
Corporation
TSH – Mr Teo Soon Hoe,
Senior Executive Director and
Group Finance Director of
Keppel Corporation
CCB – Mr Choo Chiau Beng,
Senior Executive Director of
Keppel Corporation,
Chairman & CEO of Keppel
Offshore & Marine, Chairman
of SPC