Reaching out, touching lives - Keppel Land China · Eco-City takes shape 24 Making a difference 33....

Reaching out, touching lives

JANUARY 2017www.kepcorp.com/ekeppelite

MCI (P) 032/02/2016

Preferred repair

partner 23

Eco-City takes

shape 24

Making a

difference 33

Keppelite I January 2017

Contents

CO REG NO: 196800351N

Cover image: Mr Ong Ye Kung (centre, in pink), Singapore’s Minister for Education (Higher Education and Skills), Second Minister for Defence and Minister of Parliament for Sembawang GRC (Gambas); Dr Teo Ho Pin (centre, bespectacled and in black), Mayor of North West District; and Mr Ang Wee Gee (first from left), CEO of Keppel Land, led a group of about 100 volunteers in a food distribution activity to low-income residents in the Gambas district.

Published for people in the Keppel Group by the Group Corporate Communications Division, Keppel Corporation Limited, 1 HarbourFront Ave, #18-01 Keppel Bay Tower, Singapore 098632. Printed by Image Printers Pte Ltd, Blk 1002, Redhill Industrial Estate, Jalan Bukit Merah, #03-12, Singapore 159456.

Editorial AdvisorHo Tong Yen

EditorHan Sufen

Editorial CommitteeAng Lai Lee, Brian Higgs, Brian Lee, Casey Chiang, Cheryl Goh, Chua Sian Howe, Donald Sng, Eileen Tan, Elizabeth Widjaja, Gabriela Hott Soares, Grace Chia, Hayley Teo, Hoo Yao Lin, Ivana Chua, Jayne Yeo, Kevin Ho, Liang Hui Hui, Lee Wan Jun, Mia Liu, Priscilla Chong, Razali Maulod, Ricky Ling, Roy Tan, Serena Toh, Song Jia Jia, Sue Ann Huang, Tay Jia Wei, Teri Liew, Tracy Pham, Woon Pek Yong, Yolanda Guo

New Year Message from the CEO 3

New year, new beginnings 7

SUSTAINING GROWTHSteady and ready 8

Year in review 13

In conversation 16

Focusing strengths 18

Navigating a challenging environment 19

Sustainable distributions 20

Stable growth

Board appointment 21

Celebrating new wins

World-class barge 22

Harnessing experience

Preferred repair partner 23

SPECIAL FOCUSEco-City takes shape 24

Advancing sustainable urbanisation 26

Ushering in the new year 28

Premier showcase

Safety improvements 29

Spurring InnovationsPurposeful innovations 30

EMPOWERING LIVESCultivating skills 31

Preparing for the future

Keppelites Around the WorldA taste for Singapore 32

NURTURING COMMUNITIESMaking a difference 33

Keppel VolunteersNew ties in spring 34

BACK PAGEProviding sustainable water supplies 36

Dear readers, Keppelite will be moving to a quarterly format, as part of the Keppel Group’s efforts to streamline publications and increasingly use electronic means to communicate with our stakeholders. The January 2017 issue will be Keppelite’s last edition in the current monthly version. The new quarterly Keppelite will be published in end April 2017. We appreciate your readership and value your support in this exercise. Keppelite Editorial Committee

Keppelite I January 2017Keppelite I January 2017

Dear Keppelites,

New Year Message from the CEO

Continues on page 4...

2016 was an eventful and challenging year, marked by slow global growth, the unexpected outcome of the referendum on Brexit, the US presidential election, growing insularism, and a clear pivot away from free trade and globalisation. Volatility in oil price was another feature of the past year. New technologies and business models continue to disrupt many traditional businesses. To navigate through this increasingly complex environment, companies have to be even more innovative and agile.

As a multi-business group operating in more than 20 countries, Keppel is more resilient than those operating in a single industry. However, we must also be prepared to deal with the challenges that may come from multiple fronts, just as now, when we face headwinds in a number of our core businesses and markets.

One of the key challenges we currently face is in our offshore and marine business, which has been severely impacted by the fall in oil price, and oversupply of rigs. Despite the recent spike in oil price following OPEC’s decision to reduce supply, we expect the winter in the offshore market to continue for some time. Thus far, we have responded decisively to the challenging conditions. Since the end of 2014, we have been taking painful but necessary measures to rightsize our Offshore & Marine Division, not

just in anticipation of an extended downturn, but to emerge leaner and more competitive in the long run. These gargantuan efforts must continue.

We are not unfamiliar with the cyclical nature of the offshore and marine industry. We have experienced four downturns in the past few decades, and through our hard work, agility as well as tenacity, emerged stronger from each one. So despite the headwinds we currently face, Keppel Offshore & Marine soldiers on to focus on delivering our projects well, exploring new markets and opportunities, investing prudently in R&D and building new capabilities, so that we will be ready when the upturn comes. We are also actively capturing opportunities in the growing gas market and exploring ways to re-purpose the technology that we developed in the offshore industry for other uses, such as floating desalination plants.

Through these challenging times, it will not just be the wit, but also the grit of Keppelites that will shape how the next chapter of the Keppel story will be written. I am heartened by the commitment and contributions of Keppelites around the world over the past year. On behalf of the management and the Board, I would like to thank every Keppelite who has gone beyond the call of duty to uphold the Group’s core values and operating principles, and create value for our stakeholders.

STRONGER TOGETHEROne of the Group’s key priorities is to promote collaboration among the different verticals so that, as OneKeppel, we can harness our strengths and maximise the synergies of being a multi-business group.

In 2016, we put in place an important part of this strategy with the creation of Keppel Capital, which brought together the investment and asset management capabilities in the Group. Not only can Keppel Capital strive for better operating efficiencies with the enlarged


4

...continued from page 3.

platform, it will also connect financial investors with high quality real assets and allow the Group to grow more quickly without straining our balance sheet, while creating pull-through opportunities for our different business verticals.

The recently established Alpha Data Centre Fund demonstrates how we can harness strengths among different business units – Keppel Capital, Keppel Telecommunications & Transportation, Keppel Land and Keppel Infrastructure – to create compelling propositions for

our customers and investors, as well as varied income streams for the Group. We will continue to look for ways to deepen collaboration and hunt more effectively as a pack. PRIMED FOR GROWTHA key focus of the international community is sustainable development, especially against the backdrop of rapid urbanisation in many parts of Asia. The Keppel Group is well placed to provide solutions to meet the growing demand for energy, water, clean environments, good urban living, and connectivity.

Bolstered by strong urbanisation trends, our Property Division performed well and saw strong residential sales in our core market of China and growth market of Vietnam. While the Singapore residential market remains subdued, there continues to be healthy demand for our high quality developments among discerning buyers. We have increased our involvement in selected cities in China, Vietnam, Myanmar and Indonesia, and also divested several projects, including the successfully reposit ioned Lifehub@Jinqiao in Shanghai, as we proactively recycled capital to seek higher returns. Our goal is for Keppel Land to remain a developer with one of the highest ROEs in Asia.

Our Infrastructure Division continues to build on its core competencies to seize opportunities. Keppel Infrastructure was recently named by PUB, Singapore’s national water agency, as the preferred bidder to Design, Build, Own and Operate Singapore’s fourth desalination plant for a concession period of 25 years. The plant, which is expected to be operational in 2020, will be the first in Singapore with the ability to treat sea water, and fresh water from the Marina Reservoir, by using reverse osmosis and other advanced membrane technology. We are also a leading provider of waste-to-energy technology in China.

Golar Hilli

Ocean Financial Centre


5

to the highest ethical standards wherever we operate. We must be mindful that the international regulatory environment is changing and the public’s expectations of corporates have also been raised. Our licence to operate requires us to act within legal and ethical boundaries, and with due regard to the interests of the communities that we operate in. We have augmented our compliance and control processes

In tandem with the exponential growth in data traffic, cloud computing and Big Data, Keppel Data Centres, with its proven track record of providing reliable data centre services, is accelerating its growth to capture the opportunities presented by the burgeoning demand. In 2016, the Group’s data centre business increased its footprint by more than 45%, in terms of net lettable area, by entering or expanding in markets such as Hong Kong, Italy, the UK and Germany.

Keeping pace with the increasing importance of e-commerce, Keppel Logistics acquired a stake in a Singapore based e-commerce fulfilment company, Courex, to build complementary capabil it ies in this growing and highly competitive business. More moves are planned to transform our logistics business from an asset-heavy business focused on real estate to a high performing asset-light service provider in urban logistics with a focus on connectivity and developing omni channels for distribution.

The pace o f change today i s unprecedented. We must embrace innovation and Thinking Unboxed™ to improve our value proposition and capture opportunities in a new ecosystem where regular disruptions will be the new normal.

Waste not a good crisis. As we brace ourselves for a challenging period ahead, we should also take advantage of the opportunities a downturn provides to build a stronger Keppel for the future. We are already building a stronger and leaner Keppel, one that will be better equipped to do well in a future where the pace of change will be much faster. We have embarked on a unified Enterprise Resource Planning system for the Group that will provide a much needed infrastructure backbone for our financial controls and

processes. Just as important as installing a future-proof technology system is our collective mindset. To survive and do well, we must be prepared to learn, to experiment, and to look at new ways of doing things. Just doing what we have been doing well is not enough.

ENDURING VALUESAs we grow our businesses in this increas ingly complex operat ing environment, we need to ensure that Keppelites conduct ourselves according Continues on page 6...

Launch of Palm Heights

Baoan Waste-to-Energy facility in Shenzhen, China

6



As we groom future Keppel talents and leaders, we also recognise the valuable contributions made by earlier generations. Keppel Fellows, an alumni comprising former board members of Keppel entit ies and selected members of senior management, has been established to better engage distinguished former Keppelites and tap their valuable ideas and experience.

As we usher in 2017, I look forward to the significant milestone of Keppel’s Golden Jubilee in 2018. There is a saying, “Fire is the test of gold. Adversity, of strong men.” I am confident that as we write the next chapter of the Keppel story, the challenges ahead of us will help shape and define the character of our present and future leaders. I have no doubt that they will prevail and do well. Keppel will be stronger as a result.

I wish you and all your loved ones a Happy New Year.

Yours sincerely,

Loh Chin HuaCEOKeppel Corporation

to ensure that Keppelites are well equipped to navigate the challenges of myriad laws and regulations in different jurisdictions.

There can be no compromise when it comes to safety. We have made progress in our safety journey. The company also won the largest number of awards at the Singapore Workplace Safety and Health Awards 2016. Sadly, however, we suffered seven fatalities in the Group over the past year. We owe it to the families of Keppelites and one another to ensure that every Keppelite goes home safe every day.

We will continue to sharpen our focus on people development, not just to meet today’s needs, but to prepare for a FutureKeppel. We are grooming a new generation of Keppelites who are committed to our core values and operating principles, and at the same time, are innovative, collaborative and nimble. We are working towards harmonising our human resources policies to facilitate greater mobility of staff across different businesses and different geographies so that Keppelites will be able to explore, develop and fulfil their professional aspirations within the Keppel Group.

Keppel DC Frankfurt 1

Forging ahead as OneKeppel


7

New year, new beginningsAs we enter 2017, Keppelites across the Group reflect on CEO of Keppel Corporation Mr Loh Chin Hua’s New Year Message and share their aspirations for the year ahead.

“I particularly like CEO’s message of ‘waste not a good crisis’. While we are not spared from macroeconomic challenges, our data centre team remains motivated to focus on growing our business. I am confident that as OneKeppel, we will ride through this storm.”Mr Wong Wai Meng, CEO, Keppel Data Centres

“ 2 0 1 6 h a s b e e n a challenging year for the Group. This message is a timely reminder that to remain resilient, Keppelites must be prepared to adapt to a rapidly changing environment.” Mr Wong Jen Ming, President, Keppel Batangas Shipyard

“ In tough t imes l i ke these, a paradigm shift is needed to get ahead of the competition. Against the backdrop of geopolitical changes and technological disruptions, the formation of Keppel Capital is timely and harnesses the collective strengths of the fund management units.” Ms Chua Chor Hoon, Director, Research, Keppel Capital

“As OneKeppel, we must continue to seek synergies and add value by harnessing competencies from our many businesses. I want to wish Keppel a fresh start and a successful 2017 ahead!”Benjamin Ho Si Yuan, Assistant Manager, Business Development, Keppel Infrastructure

“Having been with Keppel for nearly seven years, CEO’s message resonated with me. Through our hard work and determination, we can emerge from every storm stronger as OneKeppel. I b e l i e v e t h a t u n d e r management’s guidance, our Keppel family will reach new heights in 2017!” Jia Xinli, Deputy Director, HR, Keppel Land China (Tianjin)

8 Sustaining Growth


8 Sustaining Growth

Steady and readyKeppel has taken significant steps to steady itself against the strong headwinds in 2016 and chart the course for sustainable growth. Mr Loh Chin Hua, CEO of Keppel Corporation, discussed the Group’s strategic developments and performance at the Company’s 4Q & FY 2016 results conference and webcast on 26 January 2017. Keppelite reproduces his speech.

MACRO ENVIRONMENT2016 was a challenging and eventful year, marked by the US Pres ident ia l election, Brexit and slow global growth. A rising trend of insularism and increasing anti-globalisation sentiments, if left unchecked, could threaten free trade. The rapid evolut ion of new technolog ies and business models has also dis intermediated many traditional businesses, while creating new opportunities for companies able to seize them.

A key development at the end of 2016 was the decision by oil producing nations, both in and outside OPEC, to reduce output, the first cut in over a decade. This brought renewed optimism and conf idence to the industry, with oil prices rising to around US$55 per barrel, double the price seen a year ago.

While spending by oil majors is expected to increase, we do not envisage a quick recovery for the offshore business, which continues to be under pressure from weak utilisation of the existing operating fleet, coupled

with a supply overhang of newbuilds. We are thus prepared for the challenging conditions in the offshore business to remain for some time.

A t t h e s a m e t i m e , new hor i zons p resent themselves in the mega trends of urbanisat ion and digitalisation of the economy. This augurs well for a multi-business group such as Keppel, which can provide solutions to meet the growing demand for energy, infrastructure, clean

The Keppel Group’s milestones in 2016

environment, good urban space and connectivity.

SHAPING THE FUTURE In the past year, we carried o u t s e v e r a l s t r a t e g i c initiatives to shape our future and position Keppel for sustainable growth. We began the year by announcing the restructuring of our asset management businesses under Keppel Capital. The restructuring was completed in July and Keppel Capital had since obtained approval from the Monetary Authority of

Singapore (MAS) to centralise certain regulated activities. Keppel Capital is now an integral part of the Group’s business model of creating real assets in infrastructure and real estate.

Keppel Land completed its Selective Capital Reduction exercise and we now have full ownership of the property business. Keppel Bay, which was formerly a joint venture between Keppel Corporation and Keppel Land, is now fully integrated under Keppel Land.


Sustaining Growth 9


Over the year, we expanded our capabilities and solutions with our acquisition of the LETOURNEAU™ suite of jackup rig designs as well as aftersales and aftermarket services. We seized new growth opportunities in the LNG supply chain and in e-commerce fulfilment. We a l so bu i l t on our capab i l i t i e s and t rack record in environmental infrastructure with Keppel being awarded the tender by PUB, the national water agency, for Singapore’s fourth desalination plant. We will continue to look for ways to deepen collaboration as OneKeppel and hunt more effectively as a pack, to create compelling propositions for our customers and investors.

FINANCIAL PERFORMANCEFor the whole of 2016, we achieved a net profit of $784 million, down 49% from about $1.5 billion in 2015. This was largely due to lower contributions from Offshore & Marine (O&M) as well as additional provisions for impairment during the year of $336 million, mainly arising from the rightsizing of Keppel Offshore & Marine and impairments of investments and work-in-progress.

In 4Q 2016, net profit was $143 million. However, if we stripped out Revaluations, Impairments & Divestments (RIDs) and major provisions, the net profit of $300 million is comparable with that of 4Q 2015.

The Group’s Economic Value Added was a negative $140 million in 2016. Our Return on Equity (ROE) was 6.9%.

D e s p i t e t h e w e a k e r operating results, our Free Cash Flow was positive year-on-year with an inflow of $576 mil l ion for 2016, compared with an outflow of $694 mil l ion in the previous year. Higher home sales, asset recycling and sale of non-core assets in the Property Division have helped improve return on assets and Free Cash Flow for the Group.

Net gearing remained at a comfortable level of 0.56x, slightly lower than at the end of the last quarter.

The Board of Directors will be proposing a final dividend of 12.0 cents per share. Together with the interim cash dividend of 8.0 cents per share distributed last August, we will be paying out a total cash dividend of 20.0 cents per share to shareholders for the whole of 2016.Mr Loh Chin HuaCEOKeppel Corporation

OFFSHORE & MARINE Our O&M Div is ion has remained profitable despite the sharp downturn, with a net profit of $29 million for FY 2016.

Keppel O&M’s operating profit was $412 million and operating margin was

14.4% for FY 2016, before impairments of $277 million for fixed assets, stocks & wo rk - i n -p rog re s s and investments. Apart from reducing variable costs, we have also worked on cutting our overheads, achieving cos t sav ings o f some $150 million year-on-year.

Keppel O&M delivered more than 20 projects in 2016, including the FPSO conversion projects - Armada Olombendo and Karapan Armada Sterling III

10 Sustaining Growth



We have responded decisively to the challenging conditions facing our O&M business, not just in anticipation of a long and harsh winter, but also to build a stronger, leaner and more competitive Keppel O&M.

The painful but necessary measures to rightsize our O&M Division must continue.

In 4Q 2016, Keppel O&M reduced its direct workforce by 2,620 or about 11.8% from the previous quarter. This includes a reduction of about 1,930 in Singapore and 690 in our overseas yards.

For the whole of 2016, Keppel O&M reduced its direct workforce by about 10,600 or 35%, with about 3,800 in Singapore and 6,800 overseas. Subcontract headcount in Singapore, which has already been lowered significantly, was further reduced by about 3,300.

In tandem, we are also cutting our yard capacity and have mothballed two overseas yards. In Singapore, we are in the process of closing three yards.

In 2016, the O&M Division secured new contracts worth about $500 million and delivered more than 20 p ro j ec t s i nc lud ing several FPSO conversions and fabrication jobs, an accommodation semi, a land rig, four jackups, as well as a few specialised vessels.

We understand the strong headwinds in the offshore indust ry and cont inue to work closely with our customers to respond to the challenging conditions. On 30 December 2016, we announced that we had arrived at a settlement agreement with Parden’s guarantor for the jackup, B361, at a sale price matching the remaining payment obligations of Parden in a new sales contract with an associate of the guarantor. The rig will be delivered in 4Q 2017.

We have received requests to defer the delivery of the jackup for Falcon Energy to the second quarter of this year, and that for BOT Lease Co to January 2019. For the Falcon rig, we have received 20% downpayment, and for the BOT rig, 60% of the milestone payments.

Meanwhile, the DSS™38M semi, being built in our Caspian Shipyard Company in Azerbaijan, is on track for delivery, albeit slightly later, from 4Q 2016 to 2Q 2017 due to additional mod i f i c a t i ons needed for its charter to TOTAL. Meanwhile, the FPSO for Yinson is on track to set sail soon to begin work for Eni in Ghana.

In 2017, our yards wil l cont inue to focus on executing both existing and new contracts well. We expect to deliver some 20 newbuild and conversion

projects including the world’s first-of-its-type FLNG vessel conversion, Golar Hilli.

On the investigations in Brazil, Keppel continues to cooperate with relevant a u t h o r i t i e s t o w a r d s resolving issues in relation to contracts with Petrobras and Sete Brasil. Keppel has a ze ro - to l e rance s t ance against any form of illegal activity, including bribery and corruption, involving its employees or associates.

PURSUING OPPORTUNITIES B e y o n d d e a l i n g w i t h immediate cha l lenges , K e p p e l O & M i s a l s o positioning itself for the upturn.

We are investing prudently in R&D and building new capabilities while looking out for opportunities to service niche, adjacent, or even new markets. These include production solutions, non-drilling solutions as well as specialised vessels, such as the three dredgers awarded to Keppel O&M by the Jan De Nul Group in July last year.

Keppel is also well positioned t o a d d r e s s g r o w i n g requirements across the LNG value chain. In addition, we are exploring ways to re-purpose the technology that we developed in the offshore industry for other uses.

Ultimately, our efforts are geared towards entrenching our leadership position in the

global offshore and marine industry.

PROPERTYThe Division recorded a net profit of $620 million for FY 2016, with Keppel Land recording a higher net profit of $586 million compared to $564 million in 2015.

Keppel Land continues to recycle capital from its property assets, in line with the Group’s focus to seek higher returns. Over the year, we announced 11 divestments totaling about $680 million, including the sale of Keppel Land’s stakes in townships in Chengdu and Wuxi, and in Sedona Hotel Mandalay in the last quarter.

At the same time, we are seizing opportunities to redeploy our funds and have made investments of about $460 million across China, Vietnam and Indonesia. These include inking a JV with Indonesian developer Metland to develop landed homes in West Jakarta and consolidating our ownership in the residential project, Riviera Cove, in Ho Chi Minh City in 4Q 2016.

B o l s t e r e d b y r a p i d urbanisation across Asia, our Property Division achieved strong residential sales in 2016, especially in China and Vietnam. A total of 5,720 homes were sold in 2016, comprising about 3,800 units in China and another 1,520 units in Vietnam, with total sales value of about


Sustaining Growth 11


$2.3 billion. This is about 25% higher than the 4,570 homes sold in 2015.

We are encouraged by the positive homebuyer sentiments in Vietnam. For example, we sold some 420 homes over one weekend in December when we launched Phase 1 of Empire City in Ho Chi Minh City. We will continue to capitalise on the positive market sentiments in Vietnam. With our sizeable landbank, we plan to launch projects for sale in quick succession in the coming years. In Singapore, despite the sluggish market, we doubled the number of homes sold to 380 from 190 in 2015.

Profit from about 4,200 overseas homes sold in and before 2016 will be recognised upon completion over the next three years.

PROPERTY PORTFOLIOIn our residential pipeline of about 66,000 units, we have close to 19,000 launch-ready homes from now till 2019.

On the commercial front, Keppel Land has over a million square metres of Gross Floor Area (GFA) under development. These projects will be progressively completed and will contribute to our recurring income and eventually, to revaluation and divestment gains. Riding on

Keppel Land is deepening its presence in Vietnam and has progressed on its various projects including the Saigon Centre mixed-use development which will commence marketing efforts for its Phase 2 offices in 2H 2017

the good repute and success of Saigon Centre in Ho Chi Minh City, we will commence marketing for its Phase 2 offices in 2H 2017.

We do not seek to amass the largest landbank or build the largest property business. Our goal is to be a developer that builds quality homes, offices and commercial developments which are highly sought after by buyers and tenants, and for Keppel Land to continue being a developer with one of the highest ROEs in Asia.

INFRASTRUCTURE

Energy & Environmental Infrastructure Our Infrastructure Division posted a net prof i t of $99 million for FY 2016.

D e s p i t e t h e t o u g h conditions in the power market in Singapore, Keppel Infrastructure has done well from operations, registering a net profit of $84 million for FY 2016, excluding RIDs. This was higher compared to $46 million, on the same basis, in 2015.

We continue our focus o n b u i l d i n g K e p p e l Infrastructure into a stable contributor to the Group’s bottom line, pursuing growth opportunities in energy and environmental infrastructure both in Singapore and overseas.

We are very heartened that Keppel Infrastructure will Design, Build, Own and

Operate Singapore’s fourth desalination plant with a concession period of 25 years. To be operational in 2020, it will be the first in Singapore with the ability to treat sea water, and fresh water from the Marina Reservoir, by using reverse osmosis and other advanced membrane technology.

Keppel Infrastructure has a lso won contracts to provide waste-to-energy (WTE) technology packs for two major WTE plants in Shenzhen in 2H 2016, building on its leadership position in China.

M e a n w h i l e , K e p p e l Infrastructure is preparing competitive products and services to be ready for the full liberalisation of Singapore’s electricity market expected in 2018.

Data CentresIn 2016, the Group’s data centre business increased its footprint by more than 45%, in terms of net lettable area, in markets such as Hong Kong, Italy, the UK and Germany.

In the last quarter, Keppel Data Centres and Alpha Data Centre Fund jointly acquired a data centre in Frankfurt. We also completed the divestment of 90% stake in Keppel DC Singapore 3 to Keppel DC REIT, allowing Keppel Data Centres to recycle its capital and provide a valuable deal flow pipeline




for unitholders of Keppel DC REIT.

Meanwhile, Keppel DC Singapore 4 is expected to achieve its TOP and complete the first phase of fit-out in 1Q 2017.

LOGISTICSBuilding on our foundation in third-party logist ics, Keppel Logistics is focused on developing capabilities in omni channel distribution. The acquisition by Keppel Logistics of e-commerce fulfilment company, Courex, will strengthen our ability to tap the growing e-commerce sector in Singapore and Southeast Asia. For its reliable last-mile delivery services, Courex has recently been awarded a contract by a major international electronics group.

INVESTMENTSOur Investments Division recorded a net profit of $36 million in FY 2016, down from $185 million the year before, due to impairments of $46 million

and lower share of results from associated companies. Since its formation, Keppel Capital has been making steady progress, with profit of $64 million, slightly higher than $58 million in FY 2015.During 2H 2016, the two new funds launched by Keppel Capital, the Alpha Data Centre Fund and Alpha Asia Macro Trends Fund III, both made their first acquisitions. In addition, the Alpha Asia Macro Trends Fund II divested its Singapore suburban retail portfolio, achieving an IRR of over 50%.

Under Keppel DC REIT, assets under management have increased to approximately $1.4 billion with 13 data centres, three of which were added to its portfolio in 2016.

To harness our synergies as a multi-business company, our verticals are collaborating even more closely with one another, capitalising on their wealth of expertise, industry knowledge and networks to

Keppel Infrastructure kickstarted its 10-year contract to operate and maintain the Doha North Sewage Treatment works in Qatar

create value for stakeholders.

Keppel leads the Singapore C o n s o r t i u m i n t h e S ino-S ingapore T ianj in Eco-City, which is now in i t s e i gh th yea r o f d e v e l o p m e n t . W i t h improving infrastructure, connectivity, and a growing range of amenities including schools, business parks and community centres, we are seeing a steady increase in demand for homes and land in the Eco-City.

At a land auction this month, our 50-50 joint venture in the Eco-City achieved the sale of three land parcels for about RMB 5 billion. This works out to be an average of close to RMB 14,000 psm of GFA, higher than the last record sale price of RMB 8,000 psm of GFA achieved in July 2016.The keen i n t e re s t b y developers and appreciating land price reflect the market’s growing confidence in the Eco-City as it matures.

KrisEnergy’s preferential offering of the zero coupon

secured notes with free in-the-money detachable warrants was fully subscribed by its shareholders. We remain confident of the long-term fundamentals of the oil and gas industry, and believe we can extract good returns from our investment in KrisEnergy when the market improves. The successful Consent Solicitation Exercise to term out two existing notes, and issuance of the zero coupon secured notes mean that KrisEnergy will be on a stronger financial footing to weather any continuing volatility in oil price.

MULTIPLE INCOME STREAMS All parts of the Keppel Group are working hard to ensure that we remain re s i l i en t , de sp i t e t he headwinds . Recu r r i ng income contributed to 42% of the Group’s total net profit for the year. Gains from revaluations, divestments and reversal of prior impairments amounted to $270 million, before additional provisions for impairment during the year of $336 million.

We w i l l c o n t i n u e t o focus on growing stable, recurring income that will enable Keppel to ride out downcycles. Through the challenges, I am confident that Keppel will emerge stronger, anchored on our multi-business strategy. keppelite



$m 4Q 2016 4Q 2015 % Change FY 2016 FY 2015 % Change

Revenue 1,940 2,479 (22) 6,767 10,296 (34)

Operating Profit 98 331 (70) 795 1,514 (47)

Profit before Tax 206 574 (64) 1,055 1,997 (47)

Net Profit 143 405 (65) 784 1,525 (49)

EPS (cents) 7.9 22.3 (65) 43.2 84.0 (49)

FINANCIAL HIGHLIGHTS

Year in review Mr Chan Hon Chew, CFO of Keppel Corporation presented the Company’s financial performance at the 4Q & FY 2016 results press and analyst conference. Keppelite reproduces his speech.


The Group recorded a net profit of $143 million this quarter, which was 65% below the same quarter in 2015.

Earnings per share (EPS) was correspondingly 65% lower at 7.9 cents, while Economic Value Added (EVA) was at negative $179 million.

4Q 2016 FINANCIAL HIGHLIGHTS The Group’s revenue for the fourth quarter was 22% or $539 million lower than the same quarter in 2015. All divisions except the Infrastructure Division recorded lower revenue during the quarter.

P r o f i t b e f o r e t a x a t $206 mil l ion was 64% or $368 million lower as compared to the same quarter in 2015. This was due mainly to $313 million in additional provisions for impairment during the year for fixed assets, stocks & work-in-progress and investments.

Correspondingly, net profit after tax and non-controlling interests for the fourth quarter was lower by 65% or $262 million, and earnings per share decreased 65% to 7.9 cents.

SEGMENTAL REVIEWOverall, the Group’s revenue was 22% lower than for the same quarter in 2015, driven largely by the 40% decline in the Offshore & Marine (O&M) Division as a result of lower volume of work, deferment of some projects and suspension of the Sete Brasil contracts.

Property Division recorded l o w e r r e v e n u e a t $584 million as well, due mainly to lower revenue from Seasons Residence and The Springdale in Shanghai, Park Avenue Heights in Chengdu, and lower sales for Corals and Reflections at Keppel Bay in Singapore. These were partly offset by higher revenue from The Glades, which obtained Temporary Occupat ion Permit in December 2016, and Highline Residences in Singapore as well as Seasons

Park and Seasons Garden in Tianjin Eco-City.

Infrastructure Division’s revenue grew 12%, primarily due to higher power and gas revenue and higher Environmental Infrastructure revenue from China.

Pre-tax profit for the Group decl ined by 64% from $ 5 7 4 m i l l i o n i n t h e fourth quarter of 2015 to $206 million in the fourth quarter of 2016.

In comparison to the same quarter in 2015, O&M Division’s pre-tax profit fell from $21 million to a loss of $142 million. The Division’s losses were mainly due to lower operating results as a result of lower revenue, lower share of assoc iated companies ’ profits, and impairment of fixed assets, stocks &

wo rk - i n -p rog re s s and investment.

This was partially offset by the absence of provision for losses for the Sete Brasil rig building contracts recorded in the same period in 2015.

Property Division’s pre-tax profit decreased by 33% or $145 million due mainly to the absence of cost write-back compared to 2015’s write-back upon finalisation of the project cost for Reflections at Keppel Bay and lower fair value gains on investment properties. This was partly offset by reversal of impairment provision for hospitality assets like Sedona Hotel Yangon and Sedona Hotel Mandalay.

Pre-tax profit recorded by Infrastructure Division



declined as a result of lower fair value gains on data centres, partly offset by higher operating results in Keppel Infrastructure arising from higher revenue.

Inves tments D iv i s ion ’s pre-tax profit decreased by 54% mainly as a result of share of losses from KrisEnergy and provision for impairment of investments, partly offset by share of profit from our joint venture in the Sino-Singapore Tianjin Eco-City.

After tax and non-controlling interests, the Group’s net profit in the fourth quarter decreased by 65% or $262 million to $143 million as compared to the same period in 2015. Property Division is the top contributor to the Group’s earnings, followed by Infrastructure Division.

FY 2016 FINANCIAL HIGHLIGHTSDuring the year, the Group earned a total revenue of $6.8 billion, a 34% or $3.5 billion decrease from 2015. All divisions except for Property Division recorded lower revenues.

P r o f i t b e f o r e t a x a t $1.05 billion was 47% or $942 million lower than that for 2015. This was due mainly to lower operating profit from all divisions, and additional provisions for impairment during the year of $336 million. These consist mainly of provisions for impairment of fixed assets of $122 mil l ion, provision for s tocks & work- in -progress of $75 million and impairment of investments and associated companies o f $ 1 2 0 m i l l i o n . I n addition, fair value gain on investment properties and

share of results of associated companies were lower by $65 million and $159 million respectively.

Correspondingly, net profit after tax and non-controlling in teres t s was 49% or $741 mi l l ion lower at $784 million.

Earnings per share decreased by the same extent to 43.2 cents. This translates to a lower ROE of 6.9% while EVA was lower at negative $140 million.

F ree cash in f low was $576 million, as compared t o a n o u t f l o w o f $694 million in the prior year due mainly to the slowdown in working capital increases, divestment proceeds from Property Div i s ion, and lower operational capital expenditure from O&M Division.

Net gearing increased from 53% at the end of 2015 to 56%. However, it is slightly lower than 57% in third quarter 2016.

We are pleased to propose a final dividend of 12 cents per share for this year. Together with the interim cash dividend of 8 cents, total cash dividend for 2016 will amount to 20 cents per share.

SEGMENTAL REVIEWOverall, the Group’s revenue of $6.8 billion was 34% lower compared to 2015, led mainly by the 54% decrease in O&M Division’s revenue resulting from lower volume of work, deferment of some projects and suspension of the Sete Brasil contracts.

Property revenue increased by 12% to $2 billion as compared to the previous year, due mainly to higher revenue from The Glades and Highline Residences in Singapore, as well as 8 Park Avenue in Shanghai.

Infrastructure’s revenue decreased by 14%, mainly due to lower revenue from the power and gas business.

The Group recorded a pre-tax profit of $1 billion for 2016, 47% or $942 million lower than 2015.

The O&M Division’s pre-tax profit was 87% or $609 million lower as a result of lower operating profit, impairment provisions for fixed assets, stocks &




work - i n -p rog re s s and investments amounting to $277 million. Interest expenses was high because of increases in borrowings to fund working capital. Excluding these impairment provisions, the division’s pre-tax profit would have been $367 million.

The Division’s 2016 operating margin before impairment was at 14.4%; the higher margin was due to cost reduction, finalisation of contract costs and foreign exchange adjustments.

In the Property Division, pre-tax profit decreased by 11% or $89 mil l ion due mainly to lower fair value gains on investment properties, absence of cost write-back compared to prior year’s write-back of about $ 1 1 0 m i l l i o n u p o n finalisation of project costs for Reflections at Keppel

Bay and lower contribution from associated companies, partly offset by write-back of impairment provision of $60 million for hospitality assets, mainly Sedona Hotel Yangon and Sedona Hotel Mandalay.

Infrastructure’s pre-tax p r o f i t w a s l o w e r b y 49% or $120 million. As mentioned last quarter, the divis ion’s profits in 2015 included gains from the divestment of 51% interest in Keppel Merlimau Cogen Pte Ltd and dilution re-measurement gains from the combination of Keppel Infrastructure Trust and CitySpring Infrastructure Trust, partially offset by the provision for losses on the Doha North Sewage Treatment Works. Lower fair value gain on data centres and impairment losses of $27 mi l l ion on Nanhai Distribution Centre and

Sino-Singapore Jilin Food Zone International Logistics Park also contributed to the decrease in 2016.

Inves tments D iv i s ion ’s pre-tax profit decreased by 60% or $124 million due mainly to share of losses from KrisEnergy, lower share of profit from k1 Ventures, lower gain from sale of investments, and impairment of investment. This is partly offset by the share of profit from Sino-Singapore Tianjin Eco-City. Pre-tax profit of Keppel Capital of $76 million was slightly higher than the $72 million achieved in 2015.

A f t e r t a x a n d n o n -controlling interests, the Group’s earnings decreased 49% or $741 million to $784 million.

P roper ty D iv i s ion was the top contributor to net profit at 79%, followed

by Infrastructure Division, at 13%.

Amidst a poor market environment especially in the O&M sector, the Group recorded a net profit of $784 million for 2016. This translated to earnings per share of 43.2 cents, which was 49% lower than 2015.

FREE CASH FLOWIn 2016, operational cash inflow was $1,295 million, a decrease of $57 million compared to $1,352 million in 2015.

Outflow for working capital changes, interest and income taxes was $965 million, wh i ch i s s i gn i f i can t l y less than the outflow of $2.1 billion in the prior period. This was driven mainly by the slowdown in working capital increases in O&M Division and cash inflow from the Property Division. This resulted in the net cash inflow from operat ing act iv i t ies of $330 million as compared to an outflow of $785 million in 2015.

Net cash generated from investing activities amounted to $246 million, comprising mainly divestments and dividend income of $460 million, less investments and operational capital expenditure of $214 million.As a result , there was an overall cash inflow of $576 mil l ion for 2016, as compared to the cash outflow of $694 million in 2015. keppelite



In conversationKeppelite shares highlights of the 4Q & FY 2016 results Question & Answer session, where senior management addressed issues and concerns of the financial community.

Q: 2016 was a tough year for Offshore & Marine. Given the recent oil price rebound, how is 2017 looking for Keppel Offshore & Marine (Keppel O&M)? LCH: The rebound in oil price sets the necessary stage for the eventual recovery of the offshore sector, as it will lead to a more substantial increase in explorat ion and production spending. But i t i s not the on ly condition. There still needs to be improvements in terms of the uti l isation rate of existing fleets and absorption of the excess supply of newbuild rigs.

Q: Why was there a need for such a huge impairment in 4Q 2016? LCH: A lot of the impairments relate to the rightsizing exercise at Keppel O&M. We are going through a very long and harsh winter, so it is not business-as-usual. The steps we are taking to rightsize Keppel O&M to make it stronger and more efficient for the future necessitates that we take some strong actions in terms of capacity.

We are not just rightsizing but also looking for other new markets and new

revenue streams to prepare for the upturn. In addition to gas, Keppel O&M is looking at non-drilling solutions such as production platforms and dredgers, and also re-purposing our technology to serve new markets.

CHC: We have reviewed our global yard capacity as well as the fixed assets in the yards and did a comparison of our book cost against net realisable value. Together with our auditors, we have identif ied certain f ixed assets that we have to make impairment provisions for.

The review is quite a robust process. In addit ion to the auditors, it has also gone through the Boards and Audit Committees of Keppel O&M and Keppel Corporation.

Q: Can you provide some colour on the adjacent markets flagged for the O&M Division? For instance, what opportunities do you see from the offshore wind sector? CYY: Bes ides our core businesses, we are looking at opportunities in power generation, desalination and dredging. There are also opportunities in specialised

projects like small-scale gas distribution projects and Floating Storage and Re-gasification Units, areas in which we had built up capabilities over the last eight years.

I n t he o f f sho re w ind sector, we are pursuing opportunities in sub-stations and production units such as compression modules. Some of these are self-elevating platforms, which utilise our jackup technology. We will continue to look for suitable opportunities.

Q: Property had very strong sales in 2016. What is the outlook for property sales in 2017, particularly in the key markets of China, Vietnam and Singapore? AWG: The Chinese market has been fair ly healthy despite the government i n t r o d u c i n g c o o l i n g measures. China’s economic growth may not be as high as it was in the past, but it is still very respectable. Our projects are selling well and we expect the market to remain healthy in 2017.

Vietnam is a bright spot that we are focusing on. In the last one or two years, we have seen the market come

up very strongly. Our ground team has built up a strong reputation and brand name, as well as good connections and relationships, which we are capitalising on. On top of that, we have also built up a large landbank in Vietnam.

The Singaporean market is expected to be subdued this year. We will continue to sell Highline Residences and The Glades, developments which we are confident will sell out this year.

Q: In China, what are the opportunities for landbanking in the cities you are focused on? Would you consider expanding into other cities?LCH: Keppel Land has a landbank pipeline of about 66,000 units, which is equivalent to about 10 years of supply. Keppel Land is in an enviable position where we can buy land, which we did in 2016, but are not forced to do so. We will only buy land if the prices are attractive.

AWG: We are present in 10 cities in China, but are focused on five of them. We believe that we need to focus and scale up in



some of these fast-growing cities so that we can be as competitive as the local developers. We are not in a hurry to buy land as we have a pipeline of about 33,000 homes in China. As ment ioned by Chin Hua, we wi l l wa i t for opportunities to build up our landbank.

Q: Keppel Land’s divestments amounted to more than its investments in 2016. Will we see an increase in investments in 2017? LCH: We do not have any specif ic targets in terms of investments. It depends very much on the opportunities that come up. We are focused on m a k i n g s u re t h a t a l l o f o u r a s s e t h e a v y b u s i n e s s e s , s u c h a s Keppel Land, produce good

returns on capital employed, not just at the project level but also at the property book level.

Q: Can you elaborate on the technology that will be applied to the desalination project? Are there any synergies to be derived with the O&M Division? OTG: The desal inat ion project will utilise reverse osmosis technology. We are constantly keeping an eye out for synergies that can be extracted. In this case , the desa l inat ion project will create pull-t h r o u g h w o r k f o r t h e I n f r a s t r u c t u r e Division. In addition to bui lding and operating the plant, Keppel will also be supplying electr icity to the desalination plant under a 25 year contract.

LCH: In the future, we c a n p o t e n t i a l l y l o o k a t b u i l d i n g f l o a t i n g desa l ina t ion p lant s in land scarce countr ies . Obviously, this will bring in Keppel O&M. For this fourth desalination plant, we are pleased to have the trust of PUB to build this iconic project at the Marina Ba r r age a rea . Keppe l Infrastructure will work hard to ensure that we deliver the project safely, on time and on budget.

Q: Are current dividend levels sustainable in the long term? LCH: We have always said that when we do well, we would want to share the fruits with our stakeholders. While we do not have an explicit policy, dividend payout has always been somewhere between 40%

and 50% of our net profit each year.

We are comfortable in recommending a f ina l d i v idend of 12 cents . The amount of dividends to be paid out in future depends on the Group’s capital requirements and the market conditions at that point in time. We will re-evaluate when the time comes.keppelite

LCH – Mr Loh Chin Hua,

CEO of Keppel Corporation

CHC – Mr Chan Hon Chew,

CFO of Keppel Corporation

CYY – Mr Chow Yew Yuen,

CEO of Keppel O&M

AWG – Mr Ang Wee Gee,

CEO of Keppel Land

OTG - Dr Ong Tiong Guan,

CEO of Keppel Infrastructure

Keppel senior management engaged media and analysts at the FY2016 results briefing



Focusing strengthsHigher contribution from Keppel Telecommunications & Transportation’s (Keppel T&T) data centre division helped to boost its FY16 net profit attributable to shareholders by 15%, from $91.5 million in 2015 to $105.1 million in 2016, partly offset by weaker contribution by the logistics division.

Keppel T&T’s operating profit for the year was higher by $26.0 million due largely to gain on disposal of a subsidiary and adjustment to gains from Keppel DC Singapore 1 and 2 disposed in December 2014, partly offset by higher impairment

losses and lower contribution from the logistics division, fair value gain on investment properties, distribution from other investments and dilution gain on investment in associated companies.

Net asset value per ordinary share increased by 10% to $1.43 per share, compared to $1.30 per share at December 2015 while earnings per share increased by 14.5% to 18.9 cents. A final dividend of 4.5 cents was declared for FY16, up from 3.5 cents a year ago.

Headwinds in the form of slow pickup in China, weak recoveries in advanced

economies and uncertainties in the global macroeconomic landscape continue to weigh on the logistics industry’s prospects. Against this backdrop, Keppel T&T’s logistics division will continue to focus on optimising resources to improve margins while seeking new growth opportunities. Its recent acquisition of Courex, adds to its capability in last mile delivery and e-fulfilment, and is part of the Division’s plan to establish its foothold in the growing e-commerce sector.

On the data centre front, K e p p e l T & T e x p e c t s continued industry growth,

fuelled by the proliferation in cloud computing, big data and digitisation. During the year, Keppel Data Centres Holding expanded its geographical footprint by collaborating with the Alpha Data Centre Fund to acquire the Tier III Keppel DC Frankfurt 1 in Frankfurt, Germany.

Phase 1 of Keppel DC Singapore 4 in Singapore and PCCW-Keppel Wanchai Data Centre in Hong Kong, which are currently under development, are slated for completion in the first quarter of 2017. Looking ahead, with completion of the sale of 90% of Keppel DC Singapore 3 to Keppel DC REIT, the data centre division’s contributions in the near term will primarily be driven by recurring income from its facility management and other services. Keppel T&T remains optimistic on the data centre industry’s long term prospects and is actively seeking to grow its asset pipeline. keppelite

Higher contribution from Keppel T&T’s data centre division helped to lift its full year net profit attributable to shareholders by 15%, partly offset by weaker contributions from the logistics division



Navigating a challenging environment2016 was a challenging year for the Singapore office market given the oncoming supply of office space and aggressive leasing efforts f rom newly completed buildings. In navigating the challenging environment, Keppel REIT continued its proactive approach to renew and forward renew leases to retain tenants and mitigate leasing risk.

Keppe l RE I T ach ieved distributable income of $208.1 million for FY 2016, which included one-off income of approximately $10 million. On a year-on-yea r ( y -o - y ) bas i s , distributable income for FY 2016 was lower compared to the $217.3 million for FY 2015 due mainly to the absence of contribution from 77 King Street in Sydney, which was divested in 1 Q 2 0 1 6 , a n d l o w e r contribution from Bugis Junction Towers. Property income and net property income for FY 2016 also declined correspondingly by 5.3% and 6.6% y-o-y respectively.

Share of results of associates and joint ventures increased by 10.3% and 79.4% y-o-y to $83.5 million and $30.8 million for FY 2016 respectively. This was due to better performance

from One Raffles Quay and 8 Chifley Square in Sydney, as well as higher share of contribution from David Malcolm Justice Centre in Perth.

The Manager declared a distribution per unit (DPU) of 1.48 cents for 4Q 2016. There are no distributions of other gains for this quarter1. This brings total DPU to 6.37 cents for 2016, and translates to a yield of 6.2%2.

On the capital management front, Keppel REIT’s average cost of debt was 2.51%, and in teres t coverage rat io was 4.7 t imes as at end-2016. Aggregate leverage was 38.5% as at end-2016. The weighted average term to maturity of borrowings remained at 3.5 years, with no refinancing requirements till 2018 and beyond.

As at end-2016, committed occupancy for Keppel REIT’s portfolio remained high at 99.2%. Occupancy for the REIT’s properties in Singapore and Australia was 99.1% and 99.4% respectively, above Singapore’s core CBD of 95.8% and Australia’s national CBD office market of 88%3.

In managing the oncoming

s u p p l y p r e s s u r e a n d n o t w i t h s t a n d i n g t h a t the renewal for all leases expiring in 2016 have been completed as at end-3Q, the Manager concluded 28 leases or approximately 621,000 sf of space with attributable Net Lettable Area (NLA) of approximately 264,000 sf in 4Q 2016. This brought total leases signed during the year to 136, equivalent to 2.2 million sf of space with attributable NLA of 1.3 million sf.

I n l i n e w i t h m a r k e t expectations of cyclical headwinds exerting pressure on office rents, Keppel REIT saw a -9% rent reversion for new, renewal, forward renewal and review leases for all assets in the Keppel REIT portfolio in FY 2016. Average signing rent for the Singapore office leases concluded in 2016 was $9.60 psf.

Ongoing engagement with tenants saw the portfolio’s tenant retention rate remain high at 95% for FY 2016. The weighted average lease expiry for Keppel REIT’s top 10 tenants and overall portfolio was 9.3 years and 6.1 years respectively.

The Manager expec t s minimal leasing risks with only 3.9% and 1.7% of

leases due for renewal and review in 2017 respectively.

L o o k i n g a h e a d , t h e challenging global economic environment is expected to have a continued dampening effect on the Singapore o f f i ce l ea s ing marke t especially in 2017. While Keppel REIT’s portfolio of quality assets and its high committed occupancy as at end-2016 will help the REIT weather the supply and demand imbalance in the office sector, Keppel REIT’s rental income is not immune to the general decline in rents in the Singapore office market.

On the capital management f r o n t , t h e M a n a g e r cont inued i t s prudent approach in managing interest rate volatility, with fixed-rate loans at 75% of total borrowings as at end-2016.

The Manager maintains its strategy of adding value to its portfolio through selective acquisitions that are aligned with the REIT’s investment mandate. keppelite

1 As at end-2016, there is a total of $48 million of other gains that has not been distributed.

2 Based on the market closing price per unit of $1.02 as at 31 December 2016.

3 Source: Singapore – CBRE, as at 4Q 2016. Australia – Jones Lang LaSalle, as at 3Q 2016.



Sustainable distributionsKeppe l I n f r a s t r u c tu re Trust (KIT) reported its fourth quarter and ful l year financial results on 23 January 2017. The Trust

announced a distribution per unit (DPU) of 0.93 cents for the fourth quarter, bringing total DPU for FY 2016 to 3.72 cents. This

represents a distribution yield of 7.8% based on the total DPU divided by the closing unit price ($0.48) as at the last trading day for FY 2016.

G r o u p r e v e n u e a n d distributable cash flows for FY 2016 were $581.1 million a n d $ 1 4 9 . 5 m i l l i o n respect ive ly, compared to $427.9 mi l l ion and $90.7 million respectively for FY 2015.

This included contributions f rom Keppel Mer l imau Cogen (KMC) for 12 months versus six months in FY 2015, as the KMC Acquisition was completed on 30 June 2015; contributions from

Crystal Assets, comprising the Senoko Waste-to-Energy (WTE), Tuas WTE and Ulu Pandan NEWater plants, for 12 months versus 7.5 months in FY 2015, as the Crystal Acquisition was completed on 18 May 2015; and full 12 months contribution from the other assets of the Trust versus nine months in FY 2015 due to the change in financial year end from March to December in 2015.

Gearing as at 31 December 2016 was 37% compared to 35% as at 31 December 2015 as the Trust drew down loans to repay one of its subsidiaries and to fund the Senoko WTE Plant boiler upgrade. keppelite

Stable growthKeppel DC REIT posted $61.0 million of distributable income for the full year ended 31 December 2016, surpassing IPO forecast by 4.0% and representing year-on-year growth of 6.3%.

The Manager declared a distribution per unit (DPU) o f 2 .80 cent s fo r 2H 2016. Together with the 3.34 cents DPU paid on 31 August 2016 for 1H 2016, total DPU for FY 2016 was

6.14 cents, translating to a 6.6% distribution yield based on the IPO price of $0.93 per unit.

Approximately 242.0 million new units were listed on 15 November 2016 pursuant to the pro-rata preferential offering that accompanied the acquisition of Keppel DC Singapore 3 (KDC SGP 3). Excluding the impact of the preferential offering, the later completion of KDC SGP

3’s acquisition, and a one-off property tax refund in 3Q 2016, adjusted distribution yield for FY 2016 would have been 7.18%, 3 bps above the IPO forecast.

During the year, the Manager con t i nued i t s g rowth momentum from its first year of listing with three acquisitions. These included investments in two new data centre hubs, Milan in Italy and Cardiff in the United

Kingdom, as well as the acquisition of a 90% interest in KDC SGP 3. The latter was legally completed on 20 January 2017. The addition of the Milan and Cardiff facilities on long master leases extended the REIT’s portfolio Weighted Average Lease Expiry to 9.6 years as at 31 December 2016, enhancing income stream resilience. keppelite

Keppel Infrastructure Trust completed the progressive capacity upgrade of the Senoko Waste-to-Energy Plant on 1 September 2016, boosting the contracted incineration capacity of the plant by 10% to 2,310 tonnes per day which translates to higher operating cash flows



Celebrating new winsKeppel Offshore & Marine’s (Keppel O&M) joint venture shipyard in Azerbai jan, Baku Shipyard LLC (Baku Shipyard), has secured orders to build four new vessels worth about US$110 million.

On 18 November 2016, Baku Sh ipya rd s igned a contract with Caspian Shipping Company to build two crude oil tankers that will be able to navigate the shallow ports around

the Caspian Sea as well as travel along the narrow Volga-Don and Volga-Baltic canals. The self-propelled tankers will be equipped with six cargo tanks each and can carry crude oil and petroleum products with density of up to 1.015 tonnes/m3.

The contract was signed by the Chairman of Azerbaijan Caspian Shipping Closed J o i n t - S t o c k C o m p a n y (CJSC), Mr Rauf Valiyev, and GM of Baku Shipyard, Mr Lam Khee Chong. The signing was witnessed by H.E. Ilham Aliyev, President of Azerbaijan.

Ear l i e r, Baku sh ipyard had signed a contract on 26 October 2016 with Azerbaijan Caspian Shipping CJSC for the construction of two new unique Ro-Pax (roll-on/roll-off passenger) ferries.

The ferries are designed for freight and passenger traffic across the Caspian Sea.

Baku Shipyard was jointly deve loped by SOCAR, Azerba i jan Investment Company (AIC) and Keppel O&M. SOCAR, AIC and Keppel O&M respectively own 65%, 25% and 10% shares in the yard. keppelite

H.E. Ilham Aliyev (left), President of Azerbaijan, witnessed the signing of the contract for the two oil tankers by the Chairman of Azerbaijan Caspian Shipping CJSC, Mr Rauf Valiyev (centre), and GM of Baku Shipyard, Mr Lam Khee Chong (right)

Board appointmentThe Singapore Ministry of Trade and Indust ry announced that Mr Loh Chin Hua, CEO of Keppel Corporat ion, has been appointed as board member of the Singapore Economic Development Board (EDB) with effect from 1 February 2017.

Mr Loh is also the Chairman of several companies in the Keppel Group, namely Keppel Offshore & Marine, Keppel Land, Keppel Infrastructure,

Keppel Telecommunications & Transportation, Keppel Capital and Alpha Investment Partners. Mr Loh also holds directorship in other Keppel companies. In addition, Mr Loh is a member of the Board of Trustees of the National University of Singapore and a Council Member of the Singapore Business Federation.

Four other new members were also appointed to the EDB board.

They are: Mr Ichiro Iino, Chief Executive (Asia-Pacific), Hitachi Ltd; Professor Ilian Lubomirov Mihov, Dean, INSEAD; Mr Randy Isaac Walker, Chai rman and CEO, IBM Asia Pacif ic; and Mr Loh Boon Chye, CEO, Singapore Exchange Ltd.

The 14-member board is headed by the EDB Chairman, Mr Beh Swan Gin. keppelite

Mr Loh Chin Hua



World-class bargeOn 13 January 2017, Keppel FELS celebrated the keel laying ceremony of the FELS Can Do barge II.

Slated for completion by 31 December 2018, the FELS Can Do barge II will measure 230m by 79m, with a lifting capacity of 60,000 tonnes.

Supporting Keppel FELS’ future bus iness p lans , the barge significantly adds to the yard’s infrastructure and expands its capacity to take on repairs and upgrading works for a variety of vessels, as well

as conduct special periodic surveys.

Mr Mohamed Sahlan Bin Salleh, ED (Operations), Keppel FELS, shared, “The

Can Do barge II demonstrates our ongoing commitment to improve yard facilities and infrastructure. This new barge is another world-class facility that adds to

our operational excellence, allowing us to deliver on our commitments safely and efficiently.” keppelite

Mr Mohamed Sahlan Bin Salleh (third from right), ED (Operations), Keppel FELS, and key members of the project team, celebrating the keel laying milestone of the FELS Can Do barge II

Harnessing experienceMs Chua Ying Ying was appointed as Deputy CEO of Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. (SSTEC) on 1 Jan 2017.

Ms Chua is in charge of Business and Strategic Planning and will continue to assist the CEO of SSTEC as Head of the CEO Office. She previously served in SSTEC for four years as GM of both the CEO Office and Strategic Planning Department.

Before jo in ing SSTEC, Ms Chua served in Keppel C o r p o r a t i o n ’s G r o u p Corporate Communications (GCC) department. As head of the investor relations team in GCC, Ms Chua supported the company’s t o p m a n a g e m e n t i n engaging with investors and analysts. Ms Chua was also instrumental in the setting up of the China Desk in GCC.

Prior to joining Keppel,

Ms Chua had served as a diplomat for 14 years, with overseas postings in the Singapore High Commission in London and the Singapore Embassy in Beijing. SSTEC, the master developer of the Sino-Singapore Tianjin Eco-City project, is a 50-50 joint venture between a Singapore Consortium led by the Keppel Group and a Chinese Consortium led by Tianjin TEDA Investment Holding Co., Ltd. keppeliteMs Chua Ying Ying




Preferred repair partnerLocal and overseas yards across Keppel Offshore & Marine continue to be the partner of choice for both newbuild and repair projects. In 2016, Keppe l FELS completed 18 repair and upgrading projects with total contracts amounting to more than $100m. Repeat customers, such as Diamond Offshore and Japan Drilling Company, entrusted Keppel FELS with major repair projects, including the refurbishment of semisubmersible rigs, Ocean Apex and Hakuryu-5.

HAI YANG SHI YOU 937On 22 October 2016, China Oilfield Services Limited’s jackup rig, Hai Yang Shi You 937, arrived in Keppel FELS for repair and refurbishment works before it was re-delivered on 1 December 2016.

The job scope included an intermediate class survey, hull and leg structure painting as well as the replacement of the high pressure mud piping system and the flooring of the living quarters.

L im Yak Yang, Pro ject Manager, Keppel FELS, shared, “As we had to refurbish the living quarters’ flooring while the crew was staying on board, both project teams had to coordinate closely on the execution so that the rig

could be delivered in time for its next job.”

SIEM HELIX 1Over in Angra dos Reis, Brazil, BrasFELS partnered Helix Energy Solutions (HES) for the first time to conduct repair works on its well intervention vessel, Siem Helix 1.

The vessel arrived in the yard on 26 December 2016 for the fabrication and installation of a bulk transfer system as well as a new mezzanine deck. A zone classification

The project team from China Oilfield Services Limited and Keppel FELS celebrated the successful re-delivery of Hai Yang Shi You 937

of the mud pit room was also conducted.

Siem Helix 1, which is owned by Siem Offshore Inc. and

chartered by HES, is expected to be delivered in February 2017. The vessel will then operate in the Santos Basin, Brazil’s pre-salt region. keppelite

Repair works on the well intervention vessel, Siem Helix 1, is BrasFELS’ first partnership with Helix Energy Solutions


24 Special Focus

Eco-City takes shapeSince i t broke ground eight years ago, the Sino-Singapore Tianjin Eco-City has made steady progress in realising its vision of being a model for sustainable development.

The Sino-Singapore Tianjin Eco-City is a landmark bilateral project between t h e g o v e r n m e n t s o f Singapore and China. The master developer for the project is Sino-Singapore Tianjin Eco-City Investment and Development Co., L td . (SSTEC) , a 50-50 joint venture between a Singapore Consortium led by the Keppel Group and a Chinese Consortium led by Tianjin TEDA Investment Holding Co., Ltd.

Today, more than 70,000 people live and work in the Tianjin Eco-City. It has also attracted over 4,500 registered companies with over RMB 200 billion in registered capital1.

STEADY PROGRESSThe Sino-Singapore Tianjin Eco-City made significant progress in 2016 to provide more amenities, further improving the quality of living for its residents.

Last year, seven new schools opened in the Eco-City. The city now has 14 schools in total, providing quality learning environments to over 7,000 students.

Two neighbourhood centres, the Sino-Singapore Eco-City Hospital of Tianjin Medical University and a sports hall also started their operations in 2016.

Since breaking ground in 2008, the former barren, saline and alkaline land has been transformed into an emerging vibrant and green city

The Eco-City also started construction on five schools, three commercial complexes, two healthcare centres, a lifestyle centre, as well as the Z4 rail line, which, upon completion, will allow easy commuting from the Eco-City to the rest of Tianjin.

Mr Xu Datong, Chairman of the Sino-Singapore Tianjin Eco-City Administrative C o m m i t t e e ( E C A C ) , commented at the Sino-Singapore T ianj in Eco-City’s 2017 work meeting that “a resource-efficient, environmentally-friendly and socially harmonious eco-city is taking shape.”

PROVIDING SOLUTIONSB e s i d e s l e a d i n g t h e Singapore consortium in the joint venture, various business units of the Keppel Group are also participating in the development of the Eco-City, leveraging their competencies to provide sustainable urban solutions to the city.

Keppel Land, the property arm of the Group, is actively involved in the provision of green homes as well as office and retail space. In 2016, Keppel Land sold a total of 685 homes in the Sino-Singapore Tianjin Eco-City. Seasons City, which

Scenic view at the Old Ji Canal

1 These figures include the Tourism District and Central Fishing Port.

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In January 2017, three residential land parcels in the Eco-Island District were put up for public bidding by SSTEC. Located adjacent to Jing Lake, Old Ji Canal and the popular Fantawild Adventure Theme Park, these residential sites will be developed into an eco-community compr is ing town houses and low-rise houses amidst lush greenery.

Living up to its mission

The Sino-Singapore Eco-City Hospital of Tianjin Medical University started operations in 2016

Quality learning environments in the Eco-City

will comprise three office towers and retail premises when fully completed, is presently under construction and its first phase is expected to be completed in 2019.

The Keppel Group is also involved in addressing the need for green infrastructure and technology.

Keppel DHCS is currently providing district heating and cooling services in the Eco-Business Park in the Eco-City. It offers tenants a more cost-effective, space-saving and greener solution for large scale heating and cooling.

Keppel Infrastructure has also formed a joint venture to execute the building, owning and operating of

a water reclamation plant in the Eco-City. The plant is currently under a trial run. When completed, the project will help improve the Sino-Singapore Tianjin Eco-City’s utilisation rate of non-conventional water sources to over 50%.

Keppel Telecommunications & Transportation’s logistics distribution centre features 13,000 square metres (sm) of modern warehouse space in the Eco-Industrial Park and has begun operations in September 2016.

ATTRACTIVE LAND MARKETAs the S ino-S ingapore Tianjin Eco-City matures, it has become increasingly attractive to both home buyers and developers.

The three plots, covering an area of around 32 hectares, were sold at close to RMB 14,000 per sm of gross floor area, for a total amount of RMB 4.98 billion, with the three successful bidders be i ng L i an f a (G roup ) Co. , L td , Ch ina S ta te Construction Land (Tianjin) Co., Ltd, and Future Land Holdings Group Co. keppelite

The Sino-Singapore Tianjin Eco-City’s outstanding achievements have been highlighted in Chinese media outlets.

Outlook Weekly, a political and economic affairs weekly magazine published by China’s Xinhua News Agency, ran an article in December 2016 on the Sino-Singapore Tianjin Eco-City’s progress since Chinese Pres ident Xi Jinping’s visit to the project in May 2013.

The article commented that in accordance with President Xi’s requests, the parties involved in the project have worked together to develop it into an ecological community.

The article also highlighted the city’s eco-friendly features, such as its wide green be l t , “sponge

c ity” features, green buildings, waste reduction and recycling, as well as its pneumatic waste collection system.

T h e c i t y h a s a l s o sought to further city-industry integration by extending the principles of green development t o i t s g o v e r n m e n t a d m i n i s t r a t i o n a n d economic development plans.

In developing its green industry, the city has set up the National Animation Industry Park and created its own cultural industrial brand.

The article also lauded the city’s achievements in building an integrated smart grid which can be replicated in other parts of China.



Advancing sustainable urbanisationAsian cities are experiencing s o c i a l a n d e c o n o m i c c h a n g e f u e l l e d b y urbanisation trends. As demand for high-quality homes rises, Keppel Land continues to invest in new developments across the region and strategically p r u n e i t s p o r t f o l i o , unlocking capital.

VIETNAMThe relaxation of foreign ownership regulations and sound macroeconomic factors, including positive G D P g r o w t h a n d a burgeoning middle class, have supported Vietnam’s real estate sector. According to Vietnam’s Ministry of Planning and Investment, real estate accounted for 7% of the nation’s total

registered investment capital in 2016.

In ju s t one weekend, about 80% of Keppel Land’s 510 premium high-rise apartments at Linden Residences at Empire City were sold during its launch in December 2016. Keppel Land also received positive response for Palm Residence and Palm Heights, as well as The View at Riviera Point.

INDONESIAKeppel Land, through its wholly-owned subsidiary, PT Sukses Manis Indonesia, had in December 2016 taken a 50% stake in a joint development with PT Metropolitan Permata Development, a subsidiary of PT Metropolitan Land

About 80% of the 510 premium high-rise apartments at Linden Residences were sold over one weekend during its launch in December 2016

Tbk (Met land) , one of t h e l e a d i n g p ro p e r t y developers in Indonesia, for a total consideration of Rp 250 billion (approximately $26 million).

When completed, the joint development will yield about 450 landed homes on a 12-ha site in Tangerang, a satellite city located adjacent to West Jakarta. Strategically located within the established Metland Puri township, future residents will enjoy excellent connectivity to business districts as well as various facilities and amenities via the Merak Toll Road and the Karang Tengah Toll Road. The Soekarno-Hatta International Airport is also just a 30-minute drive away.

Mr Sam Moon Thong, President (Indonesia), Keppel Land, said, “Indonesia is one of Keppel Land’s key growth markets and we are focused on scaling up our presence in Greater Jakarta which is experiencing rapid growth. We are happy to develop a prime residential site together with a strong, like-minded partner like Metland. We seek to meet the needs of a fast-growing middle class who aspire to own quality homes.”

In line with its strategy to recycle assets for higher re tu r n s , Keppe l L and entered into a shares sales agreement to divest its 80% effective stake in joint venture company, PT Sentral Tunjungan Perkasa, to PT Indadi Land in January 2017. The total consideration amounts to approximately Rp 529 billion (approximately $57 million). PT Sentral Tunjungan Perkasa holds a prime site of approximately 23,300 sm in Surabaya’s central business district. The divestment will yield an after-tax profit of about $32 million for Keppel Land.

CHINAIn December 2016, Keppel Land China, together with its partners, entered into an agreement to divest their stakes in Cityone Development (Wuxi) Co., Ltd (CDCL) to Tianhonglixin



Keppel Land China’s divestment of its 49.7% stake in Central Park City in Wuxi will result in a net divestment gain of about RMB 190 million upon completion of the transaction

Real Estate Co., Ltd for a total consideration of RMB 1,245 million (approximately $256 million).

Keppel Land China’s effective interest in CDCL is 49.7%, with a total consideration of about RMB 619 million (approximately $127 million). The transaction will yield a net divestment gain of about RMB 190 mill ion (approximately $39 million) for Keppel Land China upon its completion in early 2017.

CDCL was formed as a joint venture company in 2005 to

develop Central Park City, a township project in Wuxi. Located within Taihu New City in the Binhu district, the township comprises three plots of land with a total Gross Floor Area (GFA) of about 670,000 sm.

Plots B and C comprise 4,559 residential units, o f w h i c h 9 8 % h a v e been so ld as a t end-November 2016. Plot A, which wi l l compr ise a residential development a n d a c o m m e r c i a l development with a GFA of 130,000 sm, is still under development.

Mr Ben Lee, President, Keppel Land China, said, “China is one of Keppel Land’s core markets and Wuxi is one of the focus cities where we will strengthen our presence. While we build a quality portfolio across several cities in China, we are also actively looking out for new opportunities to maximise returns. The divestment of our interest in Central Park City is in line with Keppel Land’s strategy to actively recycle capital to seek higher returns.”

Keppel Land China presently has three developments in

Wuxi, namely Waterfront Residences, Park Avenue Heights and Stamford City. keppelite



Ushering in the new yearH.E . Chen X i aodong , Ambassador of China to Singapore, and Dr Lee Boon Yang, Chairman of Keppel Corporation, ushered in the Year of the Rooster with a traditional tossing of Yusheng (raw fish salad) at a gala dinner organised by the Embassy of the People’s Republic of China in Singapore.

Held on 23 January 2017 at Shangri-La Hotel, the event was attended by about 600 guests from the government, military, business, education and technology sectors.

K e p p e l e n t e r e d t h e Chinese market in the early 1980s. Today, the Group has operat ions in offshore and marine, property, infrastructure and investments across 26 Chinese cities. Keppel also leads the Singapore consortiums in two high-level projects between the governments of Singapore and China, namely the China-Singapore Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-City. keppelite H.E. Chen Xiaodong (second from right), Ambassador of China to Singapore; Dr Lee Boon

Yang (second from left), Chairman of Keppel Corporation; Mr Thomas Chua Kee Seng (far left), President of Singapore Chinese Chamber of Commerce and Industry (SCCCI); and Mr Teo Siong Seng (far right), Chairman of Singapore Business Federation, celebrated the Lunar New Year with a traditional tossing of Yusheng

Premier showcaseKeppel Bay, with its world-class, iconic residential deve lopment s Co ra l s , Reflections and Caribbean at Keppel Bay as well as its multi-award-winning Marina at Keppel Bay, is a showcase for international luxury waterfront living.

On 18 January 2017, the Singapore Tourism Board hosted a visit to Keppel Bay for senior officials of the Myanmar Tourism Federation as wel l as owners and investors of hospitality entities in Myanmar. Among the distinguished delegates was H.E. U Ohn Maung, Union Minister, Ministry of Hotels and Tourism, Myanmar. keppelite

On 18 January 2017, the Singapore Tourism Board hosted a visit to Keppel Bay for distinguished delegates from Myanmar, among whom included H.E. U Ohn Maung (fourth from left), Union Minister, Ministry of Hotels and Tourism, Myanmar



Safety improvementsINNOVATIVE SOLUTIONS Opera t ions a t Keppe l L o g i s t i c s S i n g a p o r e recently achieved a leg up on safety, productivity and cost-efficiency as the logistics arm of Keppel Te lecommunicat ions & Transportation consolidated i t s Mate r i a l Hand l i ng E q u i p m e n t ( M H E ) requirements into a single provider.

The new MHE utilised by Keppel Logistics, which includes forklifts, pallet trucks and Very Narrow Aisle trucks, comes with innovative safety features such as unique access codes for each operator which enable Keppel Logistics to regulate MHE speeds for new operators and restrict unauthorised access.

In addition, complementing the reverse buzzers are blue reverse spotl ights specially installed on Keppel Logistics’ MHE units. This enhances safety by alerting surrounding personnel to a MHE in reverse through both audio and visual warnings.

To boost productivity, the MHE also features a wireless fleet management solution which logs real time data from the units, enabling Keppel Logistics to optimise operations. This initiative is estimated to achieve potential cost savings of

up to $1 million for Keppel Logistics over a three year period.

SHARING BEST PRACTICES To better understand and learn from Keppel’s Total Workp lace Safety and Health (WSH) approach, a delegation from Shell’s Health team visited Keppel Shipyard on 18 January 2017.

Hosted by Vincent Yip, Assistant GM (HSE), Keppel Shipyard, the delegation visited the recently completed Keppel Wellness Centre, which comprises a medical centre and various fitness equipment to promote the benefits of a healthy lifestyle.

Keppel Logistics’ MHE initiative boasts novel safety features such as a reverse spotlight and regulated access for operating vehicles

On top of learning about Keppel’s health and wellness initiatives, the delegation also toured Cassia Lodge where they were introduced to the wide array of amenities in the dormitory which aims

to promote harmonious living and bonding in a multinational workforce. keppelite

The delegation from Shell was briefed on the various interactive features in the Keppel Wellness Gallery



Spurring Innovations

How it works

Mechanical spring-loaded scrapers are attached to a jig (Picture1). The jig is lowered down along the guide channel with an A-frame. The spring is designed to operate with a compression load. When the load from the jig is applied, the spring exerts force on the scraper. As the scraper travels down along the guide, it shaves off barnacles and other marine growth effectively (Picture 2).

Purposeful innovationsKeppel Merlimau Cogen power p lant , which i s o p e r a t e d b y K e p p e l Infrastructure, is a combined cycle gas turbine generation facility with a generation capacity of 1,300 megawatts.

Located in the Tembusu sector of Jurong Island in Singapore, the power plant uses sea water to cool various equipment and condense steam. Before being pumped into the plant, the sea water is filtered by screens at an intake channel that is submerged in waters up to 14m in depth.

The screens undergo annual inspections to ensure smooth functioning. To do so, the intake channel must first be drained by installing stop gates in front of the screens. Before installation, third-party vendors are engaged to clear heavy marine growth, like barnacles, on the guides of the intake channel, which may otherwise obstruct installation of the gates.

Barnacles are conventionally cleared in one of two ways. The first method involves sending divers to physically scrape off marine growth from the intake channels, which is time-consuming and risky. Alternatively, remotely-operated underwater hydro

jets are used. Though this is ineffective at cleaning tight corners.

With the aim of developing a safer and more effective solution, a team from Keppel Infrastructure brainstormed and devised purpose-built mechanical spring-loaded scrapers to clean the guides (see box story for more details on the mechanism).

Since its implementation, the team has been able to use the mechanical spring-loaded scraper to clean the stop gate guides without using divers or expensive equipment. This is estimated to have achieved an average cost saving of $80,000 per annum on third-party services.

This project from Keppel Infrastructure showcases the trademark innovative spirit of Keppelites in coming up with solutions that not only minimise risk and ensure safe operations, but are also practical.

The team’s ingenuity earned them a Platinum Safety Innovation Team Project Award at the 2016 Keppel Group Safety Convention. keppelite

Picture 1

Picture 2

Empowering Lives 31


Empowering Lives 31

Cultivating skillsKeppel Logistics is a pioneer participant of the SkillsFuture Earn and Learn Programme (ELP) for the logistics sector that allows students to gain experience in full-time job positions while pursuing further educational qualifications.

On 4 January 2017, the inaugural batch of ELP participants, comprising fresh diploma graduates, celebrated the completion of the 12-month programme at a ceremony graced by Ms Low Yen Ling, Parliamentary Secretary for the Ministry of Education and Ministry of Trade and Industry.

Among them was Keppel

Logistics’ graduate, Ng Shi Ling, who received a Specialist Diploma in Supply Chain Management from Republic Polytechnic.

Under the guidance of her mentor, Abdul Wahab, Senior Executive at Keppel Logistics, Shi Ling assisted in a productivity programme that improved efficiency for her department and earned kudos from a client.

Speaking on her experience, Shi Ling shared, “I am very thankful for this opportunity. This programme has allowed me to gain real world working experience, which helped me relate better to what I have learnt in school.” keppelite

Preparing for the futureKeeping abreast of global macroeconomic and geo-political developments helps to ensure that the Group is well-placed to manage risks, develop robust strategies and capitalise on new business opportunities.

On 6 December 2016, Keppel invited Dr Simon Baptist, Chief Economist and Managing Director Asia of the Economist Intelligence Unit, to share insights on the current global economic climate including potential impact from the United States presidential election, Brexit, recent developments in

China, India and Brazil as well as provide an analysis of commodity markets.

Jointly organised by Keppel Corporation’s Group Risk and Compliance department and the Keppel Leadership Institute, the session was titled “The world economy in 2017 and beyond”.

As a part of Keppel’s Leaders Insights series, the session was attended by board directors, senior management, risk management and business development staff from across the Group, Keppel Young Leaders, as well as alumni of Keppel Emerging Leaders. keppelite

Keppel Logistics’ ELP participant, Ng Shi Ling (right), received her Specialist Diploma in Supply Chain Management from Dr Wang Jianguo, Director, School of Engineering at Republic Polytechnic

Dr Simon Baptist, Chief Economist and Managing Director Asia, Economist Intelligence Unit, provided insights on the current global economic climate and their implications on the future

32 Empowering Lives


Keppelites Around the World

Miguel Benito Dols, Power Station Manager of Keppel Merlimau Cogen plant, enjoying the local food in Singapore

“I fell in love with Singapore the moment I laid eyes on her. As I drove down East Coast Parkway from Changi Airport and into the Central Business District, I marvelled at the beautiful trees and flowers that lined the expressway,” enthused Miguel Benito Dols, as he vividly recalled his first visit to Singapore.

Originally from Madrid, Spain, Miguel, his wife and three children relocated to Singapore four years ago when he took up a job as Power Station Manager of Keppel Merlimau Cogen plant, a combined cycle gas turbine generation facility operated by Keppel Infrastructure on Jurong Is land. S ince then, his children have become used to the local environment and now regard Singapore as their second home.

“I am a family man and a terrible bachelor,” Miguel jokingly remarked. “If I had to live alone, I would be living a sad life indeed, starving and surrounded by many, many piles of dirty laundry!”

Differences between his home country and Singapore took some getting used to.

A taste for Singapore Miguel shared, “We have free access to healthcare and education in Spain, at the cost of high taxes. People sometimes take this for granted. This is the opposite in S ingapore. I admire Singaporeans’ tenacity and desire to work hard to reap the fruits of their labour in the long-run.”

With the forward-looking goal for Keppel Merlimau Cogen to become the safest and most reliable power plant in Singapore, Miguel exemplifies the Keppel Can Do! spirit by leading his team with his personal mantra, “No excuses, no self-barriers and no surrender”.

When he is not on duty, M i g u e l e n j o y s s c e n i c morning strolls in the park, swimming, cycling at East

Coast Park and Pulau Ubin and more recently, concert performances at Victoria Theatre and The Esplanade.

Miguel encourages fellow K e p p e l i t e s t o f o l l o w their dreams and explore unchartered territory, just as he has done. He enthused,

“Don’t be afraid to try something new. Always know that Keppel is behind you every step of the way and that you will not be sent out there to walk on a tightrope. Enjoy yourself and fill your mind and heart with all the experiences you can!” keppelite

Fuel for thought

A mind that is stretched by a new experience can

never go back to its old dimensions.

Oliver Wendell Holmes, Jr.Former Supreme Court Justice of the United States

Nurturing Communities 33



Making a differenceAs a responsible corporate citizen, Keppel Land engages and nurtures communities wherever it operates. Since 2016, Keppel Land has worked closely with the North West Community Deve l opmen t Counc i l (CDC) to enrich the lives of residents living in the North West District.

SPREADING CHEERAbout 6,600 underprivileged families living in the North West District received festive packs comprising food and basic necessities as part of

the WeCare@North West Service Weeks campaign.

Keppe l Land came on boa rd a s a co rpo ra te partner for this initiative in the Gambas division. On 14 January, about 50 Keppel Land volunteers, together with another 50 students and teachers from Republic Polytechnic, rolled up their sleeves to distribute festive packs to low-income families in the neighbourhood.

The volunteers were led by

Over 50 Keppel Land volunteers rolled up their sleeves to pack and distribute festive packs to low-income families in the neighbourhood

Mr Ong Ye Kung, Minister fo r Educat ion (H igher Educat ion and Sk i l l s ) , S e c o n d M i n i s t e r f o r Defence and Minister of Parliament for Sembawang GRC (Gambas); Dr Teo Ho Pin, Mayor of North West District; and Mr Ang Wee Gee, CEO of Keppel Land.

MONKEY GOES WESTOn 8 December 2016, Keppel Land hosted over 70 beneficiaries from the North West CDC (Gambas) Care & Repair Programme to watch the mus ica l

comedy “Monkey Goes West” produced by Wild Rice.

This initiative is part of Keppel Land’s partnership with the North West CDC’s Care & Repair Programme which aims to enrich the l i v e s o f S ingaporeans living in rental flats in the district.

In August 2016, Keppel Land also organised a visit for over 80 beneficiaries to the Keppel Centre for Art Education at the National Gallery Singapore. keppelite

34 Nurturing Communities


New ties in spring

Keppel Volunteers and senior friends bonded over crafting Chinese New Year decorations

Smiles all around after spending a fun-filled afternoon together

Keppel Volunteers, both in Singapore and abroad, sprang into action to herald the Lunar New Year and bring festive cheer to beneficiaries.

CRAFT AT WORKIt was an afternoon of hands-on engagement on 12 January 2017 when 30 vo lunteers and 53 senior friends from the Taman Jurong Thye Hua Kwan (THK) Senior Activity Centre worked together on creating craft.

The activity saw Keppel Volunteers and beneficiaries bonding over making Lunar New Year decorations such as gift cards and lanterns. The elderly were in high spirits as they enthusiastically recounted their families’ Chinese New Year customs and practices.

Chia Kai Ling, Assistant Commerc ia l Execut ive,

Keppel FELS, remarked, “It was heartwarming that many of the elderly remembered our regular volunteers. Such meaningful relationships can only be cultivated through sustained engagement with our beneficiaries.”

Jennifer Au, Programme Coordinator at THK, said, “The elderly always look forward to Keppel Volunteers’

events as it is interesting and well-organised.”

BAKING TREATS I n p a r t n e r s h i p w i t h t he Good l i f e ! Makan Programme by Montfort Care, 20 Keppel Volunteers organised a baking and arts and crafts session on 20 January 2017 for 15 stay-alone elderly living at Marine Terrace.

It was a fun-filled session for the volunteers and the elderly as they paired up to soak in the festivities by baking pineapple tarts and fashioning paper lanterns from ang pows.

Lee Shwu Huey, Accountant at Keppel Shipyard, added, “Many of the elderly had little or no experience in baking or making lanterns. However,



Volunteers and elderly friends tried their hand at baking Proudly showing off their craft

with encouragement, they were willing to try their hand at learning these new skills. After all, it is never too late to learn!”

R y d e r S i m , N e t w o r k Operations Centre Engineer, Keppel Data Centres, added, “The activity brought a lot of smiles to the elderly as we tried to bring them some cheer. Many of them offered me cooking tips which I will put to good use in the future!”

The Good l i f e ! Makan Programme offers a place for stay-alone elderly to cook and share meals together. More importantly, the centre is a space for conversations, learning and companionship.

L a s t m o n t h , K e p p e l Volunteers supported this programme by teaching the

elderly how to cook Nasi Lemak and paint.

SPRING CLEANINGKeppel’s spirit of giving a l so shone br ight ly in China, where volunteers from Keppel Land China (Tianjin) rallied close to 50 volunteers from other key business units in China and its business partners to spruce up the rooms of the elderly living in Hangu Social Welfare Home.

Besides scrubbing down and decluttering the living quarters, the volunteers brought festive cheer to the home by decorating the activity areas with Lunar New Year lanterns and paper crafts and by presenting gifts to the elderly.

The Hangu Social Welfare home houses over 60 underprivileged elderly who

have no source of income and little family support.

Since adopting the home in 2014, volunteers from Keppel Land China have been providing companionship and daily necessities to its residents on a regular basis. keppelite

Volunteers brought cheer to elderly living in the Hangu Social Welfare home

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Providing sustainable water suppliesKeppel Infrastructure signs Water Purchase Agreement with PUB for Singapore’s fourth desalination plant.

On 20 Janua ry 2017 , Keppe l In f ras t ruc ture , through its wholly-owned subsidiary Marina East Water Pte. Ltd., signed a 25-year Water Purchase Agreement (WPA) with PUB, Singapore’s national water agency, for the Marina East Desalination Plant, the nation’s fourth desalination plant.

The desalination plant will be constructed under a Design, Build, Own and Operate (DBOO) model and is expected to be operational in 2020. Keppel Seghers wi l l undertake

the turnkey construction and commiss ion ing of the project, while Keppel Infrastructure Services will operate the plant. Both Keppel Seghers and Keppel Infrastructure Services are wholly-owned subsidiaries of Keppel Infrastructure.

When comple ted , the Marina East Desalination Plant will be able to produce 137,000 cubic metres of fresh drinking water daily. Keppel Infrastructure will supply product water to PUB over a 25-year concession period from 2020 to 2045.

The signing of the WPA for the Marina East Desalination Plant DBOO project took place at Sheraton Towers Singapore. The agreement was s igned by Dr Ong Tiong Guan, CEO of Keppel Infrastructure and Director of Marina East Water Pte. Ltd.; and Mr Ng Joo Hee, Chief Executive of PUB. The signing was witnessed by Mr Loh Chin Hua, Chairman of Keppel Infrastructure and CEO of Keppel Corporation, and Mr Tan Gee Paw, Chairman of PUB.

Also in attendance were

senior management from Keppe l I n f r a s t r u c tu re including Ms Lim Siew Hwa, CFO; Mr Tan Boon Leng, E D ( E n v i r o n m e n t a l I n f r a s t r u c t u r e ) ; a n d Mr Alan Tay, ED (Business Development).

To be located in Marina East, the Marina East Desalination Plant will be the first in Singapore with the ability to treat both sea water as well as fresh water from the Marina Reservoir by using reverse osmosis and other advanced membrane technology. keppelite

The 25-year Water Purchase Agreement for the Marina East Desalination Plant was signed by Dr Ong Tiong Guan (second from left), CEO of Keppel Infrastructure, and Mr Ng Joo Hee (second from right), Chief Executive of PUB. The signing was witnessed by Mr Loh Chin Hua (extreme left), Chairman of Keppel Infrastructure and CEO of Keppel Corporation, and Mr Tan Gee Paw (extreme right), Chairman of PUB

Reaching out, touching lives - Keppel Land China · Eco-City takes shape 24 Making a difference 33....

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