2015 was a very eventful year for Singapore. We celebrated SG50 to mark fifty successful years as a nation, built on foundations laid by the pioneer generation. We marked the passing of our Founding Prime Minister Mr Lee Kuan Yew. We had a General Election which saw the government return with a resounding mandate thus renewing confidence in Singapore’s further growth and vitality for the future.
It was also a challenging year for businesses buffeted by international financial volatility and slowing growth in emerging markets including China. At the same time, violent acts of terrorism and pockets of geopolitical tension continue to threaten the already vulnerable global economy.
The continuing mismatch between supply and demand for oil had also depressed oil prices, to below US$30 per barrel at the start of 2016. The sharp fall in oil price has had significant repercussions not just on the oil and gas industry, but the international economy.
Against this challenging backdrop, Keppel performed creditably, demonstrating how our
For the whole of 2015, we achieved a net profit of about $1.53 billion, albeit down 19% from $1.89 billion in 2014. Higher contributions from Property and Investments were offset by lower profits from Offshore & Marine and Infrastructure, which included the provisions for the Sete Brasil projects and Doha North Sewage Treatment Works, as well as lower income from the power and gas business and the absence of gains from data centre assets which were divested in 2014 to Keppel DC REIT.
The Group generated positive Economic Value Added of $648 million in 2015, while our Return on Equity (ROE) was 14.2%. Taking into account the Group’s performance as well as the Company’s needs for future growth, the Board is pleased to propose a final dividend of 22 cents per share. Together with the interim cash dividend of 12 cents per share, this brings the full year cash dividend to 34 cents per share for 2015.
One of Keppel’s key strengths as a multi-business conglomerate with a strong balance sheet is our access to capital and ability to invest during tough times when opportunities present themselves.
We are committed to strengthen and transform the Company into a global best-in-class conglomerate at the forefront of our chosen industries. We have simplified our corporate structure, and will be sharpening our business model, recycling capital to seek the best possible returns, and promoting innovation, collaboration and synergy across the Group’s businesses.
The privatisation of Keppel Land in 2015 was a strategic move that has fully aligned the interests of our Property Division with the Group. It was immediately accretive and is providing a strong pillar for earnings and long-term value creation, with the Property Division contributing 46% of the Group’s net profit in 2015.
The full ownership of this Division has strengthened our ability to rightsize the balance sheet of our property business to capture opportunities, recycle capital and allocate resources across the Group for optimal returns and deliver on our multi-business strategy.