Engaging Keppelites around the world - Keppel Corporation

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Engaging Keppelites around the world - Keppel Corporation
A Publication of Keppel Corporation
     ISSUE

    02
      2020

               www.kepcorp.com/ekeppelite

               Engaging Keppelites                   Waste
                                                     management
                                                                  Stronger
                                                                  together
               around the world                      solutions

     MCI (P)
060/01/2020    14                                    23           44
Engaging Keppelites around the world - Keppel Corporation
Contents
1    Editor’s Note                                   32 Injecting further vitality into the Tianjin   Editorial Advisor
2    Keppel Corporation Financial Results               Eco-City                                      Ho Tong Yen
       Financial highlights                          33 Ensuring business continuity
       In conversation                                  through the COVID-19 pandemic
10   Keppel Pacific Oak US REIT Key                  34 Triple-A rating                               Editor
                                                                                                      Sue-Ann Huang
     Business and Operational Updates                35 Frontline heroes
11   Keppel REIT Financial Results
12   Keppel DC REIT Key Business and                 HSEMATTERS
                                                                                                      Copy Editors
     Operational Updates
                                                                                                      Lee Wan Jun, Ariel Tee
13   Forward together                                36 Safety excellence

SPECIAL FOCUS                                        GETTING TO KNOW YOU                              Editorial Team
                                                                                                      Ana Luisa Cruz, Ang Lai Lee, Brian Lee,
14 Engaging Keppelites around the world              38 Spotlight on: Mr Linson Lim                   Dorothy Lim, Elizabeth Widjaja,
18 OneKeppel Awards                                                                                   Emmeline Khoo, Fiona Aw, Frances Teh,
20 What the refreshed vision, mission,               40 Fuelling the future of green energy           Glenda Yang, Grace Chia, Guo Xiao Rong,
   and core values mean to me                                                                         Hoo Yao Lin, Ivana Chua, Loh Jing Ting,
                                                     KEPPELITES AROUND THE WORLD                      Nikki Lam, Roy Tan, Tang Yi Bing, Teri Liew,
23 Waste management solutions                                                                         Vanessa Ng, Yolanda Guo

24 Expansion in Yangtze River Delta region           42 Taking a bite out of the Big Apple
                                                                                                      Email: keppelgroup@kepcorp.com
25 Address for the privileged
                                                                                                      Website: www.kepcorp.com/ekeppelite
26 Creating value                                    43 Inspiring dialogue
28 M1 wins 5G network licence                           Powering up digital skill sets                Keppelite is a publication of Keppel
29 Joint studies for Floating Data Centre            44 Stronger together                             Corporation, and is published quarterly
   Park and LNG-to-power solutions                   47 Supporting tenants affected by                by the Group Corporate Communications
30 Reliable delivery                                    COVID-19                                      Division. All rights reserved. Permission from
   Test-bedding cleaner energy solutions             48 Caring for the environment                    the publisher is required for reproduction by
                                                                                                      any means in whole or in part.

                                                                                                      Printed in Singapore by
                                                                                                      Image Printers Pte Ltd.

Cover image: A Keppel-led consortium has secured an Engineering, Procurement and Construction
contract for the development of a Waste-To-Energy facility and a Materials Recovery Facility for
Singapore’s new Tuas Nexus Integrated Waste Management Facility (artist impression pictured).
Engaging Keppelites around the world - Keppel Corporation
1                                                                                                                            EDITOR'S NOTE

Editor’s Note
COVID-19 is a global crisis, impacting           While supporting efforts to combat            US$1 billion Keppel Asia Infrastructure
the health and well-being of numerous            COVID-19, we are also uniting our people      Fund (pages 26 and 27).
people, disrupting economies, and                to deliver on our mission to provide
transforming many aspects of modern life         solutions for sustainable urbanisation.       Furthermore, Keppel Offshore & Marine
that we have come to take for granted.                                                         has formed a partnership with Energy
                                                 In February 2020, we held our annual          Market Authority to develop innovative
Keppel’s first priority in our response to the   group-wide townhall, the Global Keppelite     energy solutions (pages 30 and 31), while
pandemic is to safeguard our employees,          Forum, where Mr Loh Chin Hua, CEO             Keppel Data Centres is exploring the
customers and stakeholders. In addition,         of Keppel Corporation, unveiled the           feasibility of developing a Floating Data
we have put in place robust measures             Group’s refreshed Vision, Mission and         Centre Park in Singapore (page 29).
to ensure business continuity. Keppel’s          Core Values, and provided an overview
businesses provide many essential                of Keppel’s progress towards Vision 2020      COVID-19 is accelerating changes in
services – such as power, water and waste        and our plans for the future. The inaugural   how governments, businesses and
treatment, telecommunications, data              OneKeppel Awards were also presented          people work and interact, including the
centres and logistics – which continue to        at the Forum to recognise impactful and       increasing prevalence of telecommuting,
operate during the pandemic, including           collaborative business units, Keppelites      virtual meetings and digital transactions.
the circuit breaker period in Singapore          and projects (pages 14 to 19).                These may bring about lasting changes
(page 33).                                                                                     in social norms and human behaviour,
                                                 Despite COVID-19, Keppel continued            beyond the immediate impact of the
We are proud of the numerous Keppelites          to actively pursue exciting business          pandemic. Keppel will continue to
across the Group who have been working           opportunities. A Keppel-led consortium        embrace our core value of agility in
tirelessly on the frontlines and behind-         has secured a $1.5 billion Engineering,       adapting and responding to the evolving
the-scenes to keep our operations                Procurement and Construction contract         environment, while preparing to seize
running. Their efforts ensure that critical      for the development of a Waste-To-            opportunities that may emerge during
services remain available (page 35).             Energy facility and a Materials Recovery      and after COVID-19.
                                                 Facility for Singapore’s new Tuas
During this challenging period, Keppel           Nexus Integrated Waste Management             Amidst these changes, we remain
has also stepped forward to support              Facility (see page 23); M1 was awarded        steadfast in providing reliable, quality
communities where we operate and                 a 5G network licence together with            services, and staying true to our vision of
committed over $5 million to support             StarHub (page 28); while Keppel Capital       building a sustainable future for all.
those affected by the pandemic in                continued to attract strong interest
Singapore and overseas (pages 44 to 47).         among investors, and launched the             Keppelite Editor
Engaging Keppelites around the world - Keppel Corporation
2

    Keppel Corporation Financial Results

Resilience in adversity

Mr Loh Chin Hua, CEO of Keppel Corporation, discussed the
Group’s performance and operations amid the COVID-19
global pandemic at the Company’s 1Q 2020 financial results
announcement on 29 April 2020. Keppelite reproduces his speech.

Following the change in Singapore               and circuit breakers in various countries,   have also expedited payment terms
Exchange’s (SGX) regulations regarding          and disruptions to the workforce and         for the SME (small and medium-sized
quarterly reporting, Keppel Corporation will    supply chains, Keppel’s businesses have      enterprises) community to help improve
be switching to half-yearly reporting. We       inevitably also been affected.               their cashflows during this period.
welcome the SGX’s move to encourage the
market and companies to take a longer-          Keppel’s diversification helps to            Financials
term perspective on growth. However,            strengthen our resilience during             Amidst a challenging environment, Keppel
in view of the voluntary pre-conditional        times like these. Many of our                made a net profit of $160 million. All our key
partial offer by Temasek, we will continue to   businesses provide essential services,       business units remain profitable, despite
provide quarterly reports for the duration of   such as power, data centres and              the pandemic. Net profit was 21% lower
the offer period, to keep the market abreast    telecommunications, and continue to          than the $203 million for 1Q 2019, mainly
of the Company’s latest performance. We         operate even during the ongoing circuit      due to the absence of $49 million in profit
will also take this opportunity to provide an   breaker in Singapore. The health and         from the disposal of a stake in Dong Nai
update on how Keppel’s business has been        well-being of our employees are our          Waterfront City in Vietnam last year. Our
affected by COVID-19, and the steps we are      top priority, and we have put in place       Return on Equity was 5.7% on an annualised
taking in response.                             all the necessary precautions, such as       basis. Free cash inflow was $37 million in
                                                split teams and safe distancing, at our      1Q 2020, compared to a free cash outflow of
Impact of COVID-19                              workplaces as we continue operating          $534 million in 1Q 2019, mainly due to lower
COVID-19 is having a massive impact             through the pandemic. I would like to        working capital requirements.
on the lives of countless people around         take this opportunity to express my
the world, as well as the global economy.       deep appreciation to the many frontline      Net gearing rose slightly to 0.88x as at
International Monetary Fund has projected       and operational staff in Keppel, who         31 March 2020, compared to 0.85x as at
that the global economy may contract            are working hard to provide essential        31 December 2019, mainly due to acquisitions
by 3% this year. Based on Singapore’s           services for the community during            and investments during the quarter.
Ministry of Trade and Industry’s advance        COVID-19.
estimates, the Singapore economy                                                             Keppel continues to have a strong
contracted by 2.2% year-on-year in              Beyond what we are doing within the          balance sheet and the necessary credit
1Q 2020. In response to COVID-19, the           Group, Keppel is also supporting national    lines to finance the Group’s operations.
Singapore Government has unveiled a             and international efforts to combat          Nevertheless, given the tightening liquidity
series of impactful support measures,           COVID-19. These include a $4.2 million       environment, we are watching our cashflow
to help the people and companies in             relief package co-funded by directors,       and gearing carefully, and will manage
Singapore tide through the crisis.              management and staff of the Group            costs across the Group, as we prepare for
                                                to support vulnerable communities in         a difficult operating environment that may
Keppel operates in over 20 countries,           Singapore. The package goes towards          persist for some time.
providing solutions for sustainable             supporting families living in 1 and 2-room
urbanisation. We are not directly involved      Housing and Development Board flats          Offshore & Marine
in the sectors most severely impacted by        through rebates offered by Keppel            Over the past two months, oil prices have
COVID-19. Nevertheless, with the sharp          Electric, M1 and City Gas, as well as        been roiled by shrinking global demand
fall in global economic activity, lockdowns     The Courage Fund, among others. We           caused by COVID-19, as well as the
Engaging Keppelites around the world - Keppel Corporation
3

                                                                                                     O&M’s projects have been delayed. We
                                                                                                     have served force majeure notices to
                                                                                                     customers of the affected projects and
                                                                                                     are working closely with them to mitigate
                                                                                                     the impact of COVID-19.

                                                                                                     As at end-March 2020, our net orderbook
                                                                                                     stood at $4.0 billion. While progress in
                                                                                                     securing new orders has slowed due
                                                                                                     to COVID-19 and the fall in oil prices,
                                                                                                     Keppel O&M continues to have a
                                                                                                     sizeable orderbook which will keep our
                                                                                                     yards occupied for the next two years.
                                                                                                     We continue to focus on execution, and
                                                                                                     delivered two newbuild projects and a
                                                                                                     floating production storage & offloading
                                                                                                     modification and upgrade project in
                                                                                                     1Q 2020, despite COVID-19.

Many of Keppel’s businesses provide essential services such as power, data centres (pictured) and    Our pivot away from oil has helped
telecommunications, and continue to operate even during the ongoing circuit breaker in Singapore.
                                                                                                     Keppel O&M remain resilient, with
                                                                                                     renewables and gas-related solutions
                                                                                                     making up the majority of our orderbook.
                                                                                                     We will continue to actively pursue
price war triggered by Saudi Arabia. The             more diversified business, compared to          opportunities in gas and renewables, and
International Energy Authority estimated             the situation a few years ago, when the         also repurpose Keppel O&M’s technology
that global oil demand could fall by 9% this         offshore rig building business ground to        for other floating infrastructure uses.
year due to COVID-19. Brent hit a low of             an abrupt halt after years of rapid growth.
below US$20 per barrel, a level not seen                                                             Earlier this month, Keppel O&M signed
since the early 2000s. The weak demand               For 1Q 2020, Keppel O&M made a net              a memorandum of understanding with
for oil coupled with overflowing storage             profit of $3 million. At the operating level,   the Energy Market Authority to develop
capacity even resulted in WTI (West Texas            the profit was $28 million, higher than         sustainable energy solutions. Keppel O&M
Intermediate) plunging into negative territory       the $3 million operating profit in 1Q 2019;     is also setting up a Floating Living Lab
last week. Given the current highly volatile         but this was partly offset by losses from       off its Tuas shipyard, which will serve as
environment and low prices, oil majors               associated companies.                           a platform to testbed and commercialise
are curtailing exploration & production                                                              promising power and technology solutions
spending, which will push back the nascent           In Singapore, Marine & Offshore                 for the marine sector.
recovery that we had just begun to see in            Engineering companies involved in ship/
the Offshore & Marine (O&M) sector.                  vessel repair and maintenance and               Property
                                                     overhaul services have been defined             Amid a challenging environment, our
We expect the O&M business to face                   as essential services. Our Singapore            Property Division achieved a net profit of
very challenging conditions in the                   yards have continued to provide these           $35 million for 1Q 2020. This was lower than
near future. We would also need to                   essential services during the circuit           the $132 million in 1Q 2019, mainly due to
keep a close watch on customers and                  breaker, but with reduced manpower and          the absence of gains from the divestment of
associates who would be affected if                  various precautionary measures in place.        the stake in Dong Nai Waterfront City, and
there is a prolonged downturn in oil                 Our overseas yards are also operational,        a tax write-back last year.
prices. Nevertheless, Keppel O&M is in               except for those in the Philippines,
a stronger position to weather the crisis            due to the lockdown imposed by the              Keppel Land has limited retail and
today, compared to 2015, when the last               Philippine Government.                          hospitality assets and our office portfolio
crisis began. Over the past few years,                                                               is relatively resilient to COVID-19. The
Keppel O&M has undertaken extensive                  Arising from the lockdowns in various           impact of the pandemic is therefore mainly
rightsizing and reduced its overheads.               countries and disruptions to international      on residential trading projects and its
Today, it is a leaner, more efficient, and           supply chains, several of Keppel                impact across markets is not uniform. The
Engaging Keppelites around the world - Keppel Corporation
4

Chinese market slowed down during
the lockdown over the Chinese New
Year but has since started recovering.
In Singapore, the market slowed down
with the closure of showrooms during
the circuit breaker and more cautious
sentiments among buyers; while the
market in Vietnam remained relatively
resilient during the quarter.

In 1Q 2020, we sold around 450 homes,
higher than the 390 homes in 1Q 2019,
with total sales value of about
$320 million. China contributed to the
bulk of home sales, with 330 units.
Significantly, more than 200 of these units
were sold in February and March 2020,
after the COVID-19 outbreak, reflecting
the improving confidence and sentiments
in China. Over the last weekend of April,
we launched 251 units of a residential
project in Wuxi and 164 units, or 65%,
were booked over the weekend, at prices
comparable with homes sold last year.

                                               1
Home sales were slower in Vietnam
mainly because we did not launch any
new projects during this period, while
in Singapore, we sold about 50 units.
                                              of gross floor area, of which about             Even excluding this gain, Keppel
We expect to recognise revenue for            50% is under development. They will             Infrastructure performed well, with
some 8,830 overseas homes already             progressively contribute to the Group’s         earnings double those of 1Q 2019, mainly
sold worth about $4.1 billion upon            stable recurring income, when the               driven by improved performance in
completion and handover from 2Q               projects are completed.                         Energy Infrastructure.
2020 to 2023. With the slowdown in
construction resulting from COVID-19,         Keppel Land and Keppel REIT have                With rapidly depleting landfill capacities
the handover of certain projects may          rolled out a series of measures to              and rising public awareness of
be delayed by a few months.                   support the tenants in our commercial           environmental and pollution issues
                                              properties, who have been affected              in many cities around the world,
Our total residential landbank                by COVID-19. We will do what we can             governments have become more
currently stands at about 45,000              to support our stakeholders, where              proactive in sourcing for sustainable
homes. As part of our capital recycling       possible, through this difficult period.        waste management solutions. Leveraging
strategy, Keppel Land divested our                                                            its advanced technology and strong track
equity interest in the Jiangyin project       Infrastructure                                  record in execution, Keppel Seghers is
in China for approximately                    The Infrastructure Division made a net          well positioned to support governments
$95 million. Keppel Land also                 profit of $174 million for 1Q 2020, compared    and industries with its sustainable
continued to deepen its presence in           to $16 million over the same period a year      environmental solutions.
promising Chinese regions, such as            ago. This was on the back of improved
Taicang City, to meet the demand for          earnings from Energy Infrastructure, as         Earlier this year, Keppel Seghers won
homes in the greater Shanghai area.           well as a gain of $131 million arising from     two contracts to supply waste-to-energy
                                              the reclassification of Keppel Infrastructure   (WTE) technology and services to Gujarat
Our commercial portfolio stands               Trust from an associated company to an          in India. These WTE projects would be
at about 1.6 million square metres            investment.                                     the first-of-their-kind in Gujarat.
Engaging Keppelites around the world - Keppel Corporation
5

In April 2020, a Keppel-led consortium       time, Keppel Data Centres continues to        Investments
secured a $1.5 billion contract to design    explore innovative and energy efficient       Our Investments Division recorded
and build a 2,900 tonnes per day (tpd)       data centre solutions. It is now looking      a net loss of $52 million this quarter,
WTE plant and a 250 tpd Materials            into the feasibility of developing a          compared to a net profit of $49 million
Recovery Facility, which will be part        Floating Data Centre Park at the Loyang       in 1Q 2019, which had benefitted from a
of Singapore’s new integrated waste          Offshore Supply Base in Singapore.            fair value gain from the re-measurement
management facility. Keppel’s share of                                                     of the previously held interest in M1 at
the contract is about $720 million. As the   In April 2020, Keppel Telecommunications      acquisition date. Earnings for the quarter
consortium lead, Keppel Seghers will be      & Transportation (Keppel T&T) sold a          were also dampened by mark-to-market
in charge of overall project management,     small 2.33% stake in Keppel DC REIT.          losses on some of our investments.
as well as providing the core WTE            This was an opportune move to realise
technology solutions.                        the profits from our data centres business,   Asset Management
                                             allowing the funds released to be             Keppel Capital continued to generate
In the meantime, construction works          redeployed to seize other opportunities.      steady recurring fee income, though
at the Keppel Marina East Desalination       We expect to recognise a gain of about        earnings were lower than in 1Q 2019,
Plant (KMEDP) and Hong Kong                  $46 million from the transaction. After       mainly due to mark-to-market loss of
Integrated Waste Management Facility         the sale, Keppel T&T continues to be the      $26 million on its holdings in a listed REIT.
have slowed as a result of COVID-19.         single largest unitholder and sponsor
However, the KMEDP remains on track to       of Keppel DC REIT, and we remain              Despite the challenging economic
commence operations later in 2020.           committed to the long-term growth of the      climate, Keppel Capital continued to
                                             REIT.                                         see strong investor interest for quality
Digitalisation continues to drive demand                                                   real assets that provide stable, long-
for data centres. With COVID-19 and          COVID-19 has also increased the demand        term cashflows. The recently launched
work from home arrangements further          for online sales and urban logistics,         US$1 billion Keppel Asia Infrastructure
increasing the demand for digital            especially for fast moving consumer           Fund and its co-investment vehicles
connectivity, Keppel Data Centres has        goods and health products, but there has      have, through a second closing and an
received enquiries from customers on         been a corresponding reduction in the         impending commitment from the Asian
new data centre capacity. At the same        demand for other non-essential goods.         Infrastructure Investment Bank, raised

                                                                                                                   1. In 1Q 2020, Keppel
                                                                                                            2         Land sold 44% more
                                                                                                                      homes in China than
                                                                                                                      in 1Q 2019, mainly in
                                                                                                                      Nanjing (pictured),
                                                                                                                      Chengdu and Wuxi.

                                                                                                                   2. The recently launched
                                                                                                                      US$1 billion Keppel
                                                                                                                      Asia Infrastructure
                                                                                                                      Fund has acquired, as
                                                                                                                      its first investment, an
                                                                                                                      interest in the Gimi
                                                                                                                      floating liquefied
                                                                                                                      natural gas facility.
Engaging Keppelites around the world - Keppel Corporation
6

total aggregate capital commitments         model. During the quarter, M1 and          will streamline and focus our business in
of US$570 million. The Fund has also        StarHub also submitted a joint bid for a   four key areas: Energy & Environment,
acquired as its first investment an         5G licence.                                Urban Development, Connectivity and
interest in the Gimi floating liquefied                                                Asset Management, all of which are part
natural gas facility.                       Sino-Singapore Tianjin Eco-City            of a connected value chain, which we will
                                            In China, our joint venture master         grow both organically and inorganically.
In addition, a large Asian pension fund     developer Sino-Singapore Tianjin Eco-
and a sovereign wealth fund each            City Investment and Development Co.,       Capital allocation will be driven by the
committed US$200 million to be invested     Ltd. (SSTEC) continued to drive the        Group’s strategy and business model.
in funds managed by Keppel Capital.         development of the Tianjin Eco-City.       These include (i) whether the business
                                            In April 2020, SSTEC sold a residential    contributes to our ROE target of 15%, (ii)
Separately, the Keppel-Pierfront Private    plot for RMB 1.17 billion, at a land       whether it is scalable, (iii) its potential
Credit Fund achieved a first close of       price comparable to a similar plot sold    for integration and synergy with other
US$200 million earlier in April, while      in 2019. This reflects the continuing      parts of Keppel, and (iv) whether it
Keppel Capital has entered a 50:50          confidence and demand for land in          is aligned to our Vision, Mission and
joint venture with Australian Unity to      the Eco-City. The sale is expected to      environmental, social & governance
establish funds focused on the Australian   contribute earnings of about $30 million   goals. As part of the process of
metropolitan office sector.                 to the Group when it is completed in the   refocusing our business, we have
                                            second quarter.                            commenced a strategic review of our
M1                                                                                     logistics business.
With consolidation of a full quarter’s      Vision 2030
earnings, M1 made a bigger contribution     As we manage the impact of COVID-19,       Keppel’s Vision 2030 is close to being
to the Group, compared to 1Q 2019.          we remain focused on executing             finalised, and we will share more with
Demand for mobile services remained         our plans and building a sustainable       the investment community in the next
resilient despite the pandemic. M1          business for the long term. During the     few weeks.
added 20,000 postpaid customers in the      FY 2019 results announcement, I spoke
quarter. However, roaming and prepaid       about Keppel’s Vision 2030 exercise,       To conclude, COVID-19 will cause
revenue have fallen due to the sharp        where we gathered younger business         considerable disruption and pain.
drop in international travel, while the     leaders in the company to draw up          The post-pandemic world may also
sale of handsets and information and        Keppel’s long-term strategy. This          not be the same as before. Trends
communications technology related           process, which started from 1H 2019, has   like working from home, learning
equipment have also slowed due to           continued over the past few months.        from home and online shopping will
customers deferring their spending and                                                 probably become even more prevalent.
supply chain disruptions.                   Looking ahead, we see Keppel growing       Countries and companies may seek to
                                            increasingly as one integrated business,   further diversify their supply chains.
Over the past few months, M1 has            collaborating and channelling our          This will create additional disruptions,
enhanced the connectivity solutions         capabilities to provide solutions for      as well as opportunities for companies
across its business lines to support        sustainable urbanisation. Through          able to seize them. Notwithstanding
customers’ needs amid COVID-19.             Keppel Capital, we will tap third-party    the immediate challenges posed by
Notwithstanding the short-term              funds for growth and our eco-system        COVID-19, there is inherent value in
headwinds, COVID-19 has accelerated         of REITs and business trusts to recycle    Keppel’s businesses and our synergy
digital transformation for many             capital. Many investors are on the         as a group providing solutions for
organisations as well as the adoption of    lookout for real assets with cashflow.     sustainable urbanisation. This will not
new ways of working. This will, over the    Opportunities could emerge after the       change because of the pandemic.
longer term, create new opportunities for   COVID-19 crisis and Keppel is well         Keppel has faced many challenges
our connectivity business.                  positioned to tap these opportunities,     over the past five decades. I am
                                            together with our strategic investors.     confident that working together as
In the meantime, M1 is continuing its                                                  a group, and with the support of
transformation to enhance its digital       We will take a disciplined approach to     our stakeholders, we will overcome
capabilities and digitise its business      managing our businesses. The Group         COVID-19 and emerge stronger.
Engaging Keppelites around the world - Keppel Corporation
7

    Keppel Corporation Financial Results

Financial highlights

Keppelite reproduces excerpts of the presentation by Mr Chan Hon Chew,
CFO of Keppel Corporation, on the Company’s 1Q 2020 financial performance.

1Q 2020 financial highlights

$m                                                                                              1Q 2020      1Q 2019     % Change

Revenue                                                                                            1,857         1,531           21
Operating Profit                                                                                    273           322            (15)
Profit Before Tax                                                                                   247           283            (13)
Net Profit                                                                                           160          203            (21)
EPS (cents)                                                                                          8.8          11.2           (21)

1Q 2020 financial highlights                  However, operating profit fell by 15%       expense and lower share of losses from
In 1Q 2020, the Group recorded a net          or $49 million despite higher revenues,     associated companies.
profit of $160 million, which was 21%         largely due to the absence of fair value
lower than the same quarter last year,        gain on remeasurement of previously         Free cash inflow was $37 million during
with the Infrastructure Division being the    held interest upon acquisition of M1        the quarter, as compared to an outflow of
top contributor to the Group’s earnings,      compared to first quarter in 2019, lower    $534 million in the 1Q 2019 mainly due to
followed by the Property Division and         gain on disposal of subsidiaries and        lower working capital requirements from
Offshore & Marine Division. This translated   higher fair value loss on investments,      Property Division and positive working
to Earnings Per Share (EPS) of 8.8 cents.     partly offset by the mark-to-market         capital changes for Infrastructure
                                              gain from reclassification of the Group’s   Division, partly offset by higher
Consequently, annualised Return on Equity     interest in Keppel Infrastructure Trust     working capital requirements from the
decreased to 5.7% as at 31 March 2020.        from an associated company to an            construction progress of Offshore &
                                              investment carried at fair value through    Marine Division’s major projects such
The Group’s revenue for the first quarter     comprehensive income.                       as the Awilco semisubmersibles, Borr
was 21% or $326 million higher than                                                       jackup rigs and Golar Gimi Floating
1Q 2019. Higher revenues from the             Profit before tax of $247 million for       Liquefied Natural Gas vessel.
Offshore & Marine and Investments             1Q 2020 decreased by a smaller extent as
divisions were partially offset by lower      compared to the decrease in operating       For more information on the results,
revenues from the Property Division.          profit, due mainly to lower net interest    please visit www.kepcorp.com.
Engaging Keppelites around the world - Keppel Corporation
8

    Keppel Corporation Financial Results

In conversation

Keppelite shares highlights of management’s responses to questions from the media and analysts at
the Company’s 1Q 2020 results conference call.

Q: How are the downturn and current              of our colleagues and co-workers, who              it is to reassure them that they will get paid.
oil prices impacting new order flow for          were deemed to be in close contact                 They do not have to worry about being paid.
Keppel O&M?                                      with the infected employee, on leave of            The main thing is to get well.
                                                 absence. That expanded very quickly to
LCH: The current situation with the oil price    1,200 workers by 6 April. Over time, we            We are also now planning: When the
has obviously created some challenges for        have put almost 4,000 workers on leave             circuit breaker is over at some point, how
the offshore sector. Fortunately for Keppel,     of absence. This was on our own accord,            do we return to work safely? At the end
our existing orderbook is quite decent. We       before any intervention by MOH.                    of the day, safety comes first. This has
have almost $4 billion of net orders that will                                                      guided us in how we have managed this
keep us busy, at least for the next two years.   The safety of our workers comes first.             very difficult moment, and it will continue
                                                 Keppel O&M moved very quickly to                   to guide us as we think about post-circuit
We have also pivoted away from oil               ensure that we were able to get some               breaker, because the danger will still
since 2015, so you will find that the            control over the situation.                        probably reside for quite a while.
majority of orders in our orderbook are
in renewables, gas solutions and non-oil         We cannot talk about the individual                Q: Given the encouraging performance
and gas. Going forward, you would expect         conditions of the workers; but generally,          from the China residential launches over
that unless oil prices recover faster, there     as you have read in the papers, amongst            the weekend, are you planning to ramp
will be an impact on the Exploration &           the migrant workers, most of the cases are         up launches over the next few months?
Production spending by the oil majors.           either asymptomatic or they have very mild
                                                 symptoms. More importantly, at this moment,        LCH: It is very encouraging, and we are
Having said that, we continue to see             none of our workers are in the ICU (intensive      looking at how we can do more launches.
quite strong enquiries and interest in           care unit). We are watching this very closely.     We have quite a number of units in
the renewables space; and I believe that                                                            China, a number of projects that are
demand for production assets like FPSOs          Keppel is acknowledged in the industry for         launch-ready. Depending on the market
and FLNGs will remain quite robust.              running very good quality dorms. These             conditions, if we think it is favourable, we
                                                 dorms would typically have a sitting room          will definitely push ahead.
Q: Both foreign worker dormitories that          with two bedrooms. We also have a games
Keppel operates are under quarantine, can        room, a supermart and various recreational         For Vietnam, there was not much sales in
you take us through the situation there?         facilities for the workers.                        the first quarter, not because the market
                                                                                                    was weak, but mainly because we have no
LCH: Both dormitories, Acacia and                From the agencies that have worked with            units to sell. The reports on the ground are
Cassia@Penjuru, have been gazetted               us on these two dorms, their feedback on           that the demand for housing apartments in
and isolated by Ministry of Health (MOH).        the morale and discipline of our workers           Ho Chi Minh City remains strong.
MOH has designated three clusters in our         was very good, and of course we do our
Group. One is at Keppel Shipyard, and two        best. It is a very difficult situation for them.   We are now looking to see whether we
at the dormitories you have just mentioned       The management team at Keppel O&M is in            can have some projects to launch. Our
that are operated by Keppel Housing.             regular contact with the workers. It is not just   colleagues in Keppel Land Vietnam are
                                                 about providing food and all that, which is        quite confident that we can get a good
We had our first COVID-19 case at Keppel         very important, but also providing access so       result. We have also heard in recent
Shipyard on 30 March. We were very               that they can speak to their families with SIM     days that the lockdown in Vietnam
fast in quickly putting about a hundred          cards and also with WIFI. More importantly,        has either been removed or has been
9

reduced, and some of the retail malls           that has taken place over time. If you         We were very pleased to see that three
are also now reopened.                          look at KIT’s portfolio, it has evolved        very credible developers registered to
                                                over the years and the nature of the           tender for this site, and there was quite
Q: Are the plans to redevelop Keppel            assets has expanded beyond the focus           active bidding. We managed to sell the site
Towers still ongoing? Or will the plans be      as well as the scope of the Group. In          at a small premium to the reserve price.
delayed in the current environment?             2015, there was the combination of
                                                KIT and Cityspring Infrastructure Trust        It is one of the themes that we see,
LCH: Keppel Towers has been decanted.           (Cityspring). If you look at the assets,       namely that the pandemic has affected
We used it for a while as an alternate          there are a lot that are not quite the         different parts of our business and even
work site in March. During March, in the        Group’s focus. More recently, KIT              geographies differently. We have seen that
early part of the virus pandemic, we had        invested in Ixom, which just happened          China was the first to be affected. They
split teams and some of us were actually        last year.                                     went through a very severe lockdown
using Keppel Towers for a few weeks.                                                           particularly in Hubei and Wuhan. But in the
But it is now vacated. The plan is that it      Arising from the merger with Cityspring,       last few weeks, many of these cities are
will be demolished and redeveloped. I do        our stake was also diluted down to 18%.        now back online, including Wuhan.
not believe there will be any delays, other     With the recent development in terms of
than the fact that we can’t start work          the reduction in our Board representation,     We have seen that the land sales in
during the circuit breaker.                     and also the undertaking to provide KIT        some of these cities have been quite
                                                unitholders with the right to endorse the      encouraging, where developers are
Q: On the partial sale of Keppel DC             appointment of directors of the Trustee-       bidding and are prepared to bid, and
REIT units, is this a general cash-raising      Manager, these have resulted in the loss       frequently the sites are being obtained
strategy that we can expect given the           of significant influence over KIT.             at a premium. Some of the premiums are
current circumstances, or is this just                                                         quite significant over the reserve price.
to take advantage of the share price of         So the right accounting treatment for
Keppel DC REIT?                                 the stake in KIT is not as an associate,       For the SSTEC land sale, the price per
                                                but it should be an investment. Under          square metre of about RMB7,000 is about
LCH: This is just part of our way of            the accounting standards, even for             the same as a site that we sold last year.
recycling and locking in some profits.          investments you have a choice between
This is done by Keppel T&T. We are still        fair value to P&L and fair value to OCI        As for whether we will sell more sites this
very bullish about the data centre space.       (Other Comprehensive Income). We have          year, that would depend on the market
You know the business model we have             chosen to account for it as investment         conditions. SSTEC does some self-
with using private funds to work with           for fair value to OCI. The reason is that      development and also does land sales. So
investors to build this and then hopefully      the sponsorship relationship is still very     we would expect that to continue.
when it is de-risked, monetise it by selling    important. That is important to reinforce,
it to Keppel DC REIT. From time to time,        because the sponsorship relationship           CHC: The buyer is a major developer
Keppel T&T will also need to free up its        is for the mutual benefit of both KIT          listed on the Hong Kong Stock Exchange
capital, so that we can continue to invest in   and Keppel. We do not expect to sell           with headquarters in Tianjin.
new projects that are under development.        the stake for profit in the future. So
So, it has got more to do with that.            any movement in the fair value goes to         Q: On the Temasek partial offer, is
                                                the OCI, rather than P&L. That is the          there any financial impediment given
I think Hon Chew and the finance team           rationale behind that.                         the volatility that we are seeing in the
have done a great job in making sure that                                                      market right now?
the Group’s finances are in good order,         Q: Could you give us more colour on the
in good shape. That would explain why           buyer and price of Tianjin Eco-City’s          LCH: There are three MAC (material
you can see that the cash balance in the        recent land sale? Should we be expecting       adverse change) clauses. As of the first
Group has gone up.                              more in 2H 2020?                               quarter results, I do not believe we have
                                                                                               breached any of these three MAC clauses.
Q: Could you share the rationale for            LCH: The SSTEC (Sino-Singapore Tianjin
reclassifying Keppel Infrastructure Trust       Eco-City Investment and Development            LCH – Mr Loh Chin Hua,
(KIT)?                                          Co. Ltd.) land sale is something that is       CEO of Keppel Corporation
                                                quite encouraging. This is, of course, still
CHC: The KIT reclassification did not           very early days in terms of China coming       CHC – Mr Chan Hon Chew,
just happen overnight, but is something         back from their lockdown.                      CFO of Keppel Corporation
10

                                                                                                                  1. The functional
                                                                                                                     collaborative spaces in
                                                                                                                     Keppel Pacific Oak US
                                                                                                                     REIT’s properties provide
                                                                                                                     a live-work experience
                                                                                                                     for tenants. Pictured here
                                                                                                                     is Bellevue Technology
                                                                                                                     Center in Seattle,
                                                                                                                     Washington.

                                                                                                                  2. HSBC Singapore begins
                                                                                                                     its 10-year lease at
                                                                                                                     one of Keppel REIT’s
                                                                                                                     properties, Marina Bay
                                                                                                            1        Financial Centre Tower 2
                                                                                                                     (pictured), in May 2020.

 Keppel Pacific Oak US REIT Key Business and Operational Updates

Steady returns
Keppel Pacific Oak US REIT (KORE) has             Based on the latest audited financial         Notwithstanding the COVID-19
adopted half-yearly announcement of               statements of KORE for the financial year     situation, the Manager remains focused
financial statements with effect from the         ended 31 December 2019 (FY2019), had the      on delivering sustainable distributions
financial year ending 31 December 2020.           restructuring been completed on 1 January     and strong total returns to Unitholders.
Accordingly, the next announcement                2019, the distributable income for FY2019     KORE’s resilient and highly diversified
of financial statements will be for the           would have increased by approximately 1.5%.   portfolio with low tenant concentration
half-year period ending 30 June 2020.                                                           risk will continue to sustain long-term
Nevertheless, KORE has provided key               In 1Q 2020, the Manager leased                returns for Unitholders.
business and operational updates for              104,000 sf of space, mainly in Seattle,
the first quarter of 2020 to engage               Atlanta and Houston. This was                 With approximately 55% of its
investors and other stakeholders on the           equivalent to about 2.2% of KORE’s            portfolio in the key technology hubs
performance of KORE.                              total portfolio, bringing KORE’s portfolio    of Seattle, Denver and Austin, KORE’s
                                                  committed occupancy by net lettable           focus on the growth in defensive
KORE has achieved distributable income            area to 94.0% as at 31 March 2020.            technology and healthcare sectors is
of US$14.4 million for 1Q 2020, 16.1%             KORE’s overall portfolio recorded a           a distinctive factor and a cornerstone
higher than in 1Q 2019. The continued             positive rental reversion of 12.0%. For       of its strategy. Almost all of KORE’s
year-on-year improvement is largely due           the rest of 2020, KORE has only 6% of         leases have built-in average annual
to contributions from One Twenty Five             leases due for renewal.                       rental escalations of 2.6%, which will
in Dallas, Texas, which was acquired in                                                         continue to be a key organic growth
November 2019, as well as positive rental         The Manager continues to maintain             driver for Unitholders.
reversions from leasing done in 2019.             its prudent approach towards capital
                                                  management. KORE has limited                  Looking ahead, the Manager remains
On 7 April 2020, the final tax regulations        interest rate exposure with term loans        committed to operational excellence
under Section 267A of the United States           significantly hedged. As at 31 March          with a focused leasing strategy to
Internal Revenue Code were issued. Arising        2020, the weighted average term to            maximise rents and achieve positive
from the final regulations, with effect from 16   maturity of KORE’s debt was 2.9 years         rental reversions, while seeking value
April 2020, KORE has reverted to a structure      with an all-in average cost of debt of        accretive acquisitions in key growth
which does not involve the Barbados               3.53% per annum. Aggregate leverage           markets, as well as maintaining a
entities, largely following the structure which   and interest coverage ratios were 36.9%       prudent approach towards capital
KORE used when it was initially listed.           and 4.2 times respectively.                   management.
11

     Keppel REIT Financial Results

Resilient income
Keppel REIT has achieved distributable            will also be able to utilise one month’s     Notable tenants that are scheduled to
income of $47.3 million for 1Q 2020,              security deposit to offset rent payment.     move into Keppel REIT’s properties
including capital gains distribution of                                                        include HSBC Singapore, whose 10-year
$5.0 million. Notwithstanding the absence         As for Keppel REIT’s overseas markets,       lease at Marina Bay Financial Centre
of rental support and lower income                support measures in line with the relevant   Tower 2 begins in May 2020, as well as
contribution following the divestment of          government advisories issued will also be    the Victoria Police, whose 30-year lease
Bugis Junction Towers in November 2019,           extended to all qualifying tenants. These    at 311 Spencer Street in Melbourne is
distributable income was maintained               measures serve to support the business       expected to start by end-2Q 2020.
year-on-year due mainly to the                    continuity of tenants and the long-term
acquisition of T Tower in May 2019, higher        interests of all stakeholders.               The COVID-19 pandemic presents
capital gains distribution, as well as lower                                                   unprecedented challenges to the
borrowing costs. Distribution per Unit for        As at 31 March 2020, Keppel REIT’s           business community. The Manager
1Q 2020 was 1.40 cents.                           portfolio committed occupancy was            remains focused on maintaining
                                                  high at 98.9%. The portfolio and top ten     stable and sustainable distributions
As at the end of 1Q 2020, the majority of         tenants’ weighted average lease expiry       to Unitholders, and achieving
loans due in 2020 have been refinanced            (WALE) remained long at approximately        long-term growth. Keppel REIT ’s
while commitments have been received              4.7 years and 6.7 years respectively.        portfolio of established tenants from
for the remainder. Aggregate leverage                                                          diversified sectors, high portfolio
was 36.2% and all-in interest rate                Keppel REIT has a diversified tenant         committed occupancy and long
was 2.58% per annum with interest                 base, many of whom are established           WALE will continue to support the
coverage ratio at 3.2 times. To meet              blue-chip corporations.                      REIT ’s income resilience.
future financing obligations, Keppel
REIT has approximately $966 million
of undrawn credit facilities available, of
which approximately $400 million are
                                                   2
committed facilities.

With the safety of its tenants as the Manager’s
first priority, precautionary measures were
implemented across all properties at the
onset of the COVID-19 outbreak.

In Singapore, to ease tenants’ cash flow
and cost pressures during the COVID-19
outbreak, Keppel REIT has extended
approximately $9.5 million of tenant
support measures. These include the
full pass-through of property tax rebates
(estimated to amount to approximately
$8.2 million) of 30% to its office tenants
and 100% to its retail tenants, in line with
the Singapore Government’s Resilience
Budget which was announced on
26 March 2020, as well as full rental
waiver for April 2020 to eligible retail
tenants. In addition, eligible retail tenants
12

 Keppel DC REIT Key Business and Operational Updates

Essential asset class

Updates for 1Q 2020                          The Manager maintains a proactive asset              clients. Global supply chains have been
Keppel DC REIT has adopted half-yearly       management strategy to improve the                   strained due to the pandemic, and as
announcement of financial statements         efficiency and returns of its portfolio. As          such, the Manager is closely monitoring
with effect from the financial year ending   at 31 March 2020, the portfolio occupancy            the progress of its asset enhancement
31 December 2020. Accordingly, the next      rate remained healthy at 94.7% and the               works at Keppel DC Dublin 1, Keppel DC
announcement of financial statements         weighted average lease expiry (WALE)                 Singapore 5 and DC1. Development of
will be for the half-year period ending      remained long at 8.3 years.                          Intellicentre 3 East Data Centre in Sydney
30 June 2020. Nevertheless, Keppel DC                                                             is expected to be complete in 1H 2021.
REIT continues to engage stakeholders        During the quarter, Keppel DC REIT
proactively, and provided key business       completed the acquisition of the                     The data centre market remains resilient
and operational updates for the first        remaining 999-year leasehold land                    in this pandemic. Notwithstanding
quarter of 2020 on 21 April 2020.            interest at Keppel DC Dublin 1. As part              increased competition in the data centre
                                             of its proactive asset management                    industry, Keppel DC REIT will continue
Keppel DC REIT has delivered                 approach, the Manager also announced                 to seek growth opportunities and
distributable income of $35.8 million        plans to convert vacant space at Keppel              strengthen its presence across key data
for 1Q 2020, 32% higher than                 DC Dublin 2 into a data hall, which is               centre hubs globally.
1Q 2019’s $27.1 million, supported           expected to complete in 1H 2021.
by contributions from Keppel DC                                                                   Completion of acquisition
Singapore 4 and DC1; both acquisitions       As the COVID-19 outbreak continues                   On 1 May 2020, Keppel DC REIT
were completed in 4Q 2019.                   to evolve, the Manager has put in place              announced that the acquisition of the
                                             stringent measures at its colocation                 100% freehold interest in Kelsterbach Data
Accordingly, Keppel DC REIT achieved         facilities to protect its employees and              Centre, in Germany, has been completed.
a distribution per Unit (DPU) of
2.085 cents for 1Q 2020, 8.6% higher
than the DPU of 1.920 cents in 1Q 2019.
                                             Keppel DC REIT has completed the acquisition of the remaining 999-year leasehold land interest at
                                             Keppel DC Dublin 1.
In March 2020, the Manager obtained
a EUR 50 million revolving credit
facility and a EUR 50 million term loan
facility. The REIT’s aggregate leverage
remains low at 32.2%, providing a
comfortable debt headroom to pursue
further growth.

Keppel DC REIT’s average cost
of debt remained low at 1.7% per
annum and its interest coverage
ratio remained high at 12.8 times.
As at 31 March 2020, the Manager
has locked in 77% of its borrowings
through floating-to-fixed interest rate
swaps. In addition, forecasted foreign-
sourced distributions have also been
substantially hedged till 2H 2021 with
foreign currency forward contracts.
13

     Forward together
     We are building a sustainable future for all our
     stakeholders as OneKeppel, creating a spectrum of
     solutions which are good for the planet, for people and for
     the Group.

     Beyond the variety of businesses they represent, the
     Group’s FY 2019 annual reports converge on the Keppel
     difference – our ability to harness Keppel’s diverse
     capabilities to create value for stakeholders at different
     stages of the value chain.

     Collaborating with one another, Keppel’s business units
     open up opportunities that each may not have been able
     to capture alone.
14                                                                                                                     SPECIAL FOCUS      15                                                                                                                        SPECIAL FOCUS

                                                                                                                                          solutions for a sustainable world, that      GKF 2019, and implemented during              will be reduced to five – Agility, People-focus,
                                                                                                                                          are good for the planet and people, and      the course of 2019. He said, “There is a      Accountability, Can Do and Safety.
                                                                                                                                          create new profit pools in the process.”     consensus among internal and external
                                                                                                                                                                                       stakeholders that Keppel is a trusted and     To reflect our common purpose and
                                                                                                                                          Vision 2030                                  reliable company. While this is a hard-       collaboration as OneKeppel, the logos
                                                                                                                                          Looking ahead beyond 2020, Mr Loh            earned reputation that we must maintain,      with the Keppel wordmark have also been
                                                                                                                                          said, “As we complete Vision 2020, we        we must also strengthen our focus on          aligned with effect from 1 March 2020.
                                                                                                                                          must set our eyes on the future. We are      sustainability, as well as be an agile
                                                                                                                                          now finalising Vision 2030, with interim     and innovative company. This will be an       Great place to work
                                                                                                                                          targets for 2025. We should grow as          integral part of our strategy and how we      Recognising that people are the
                                                                                                                                          one integrated business, with a clear        run our businesses.”                          company’s greatest assets, Mr Loh also
                                                                                                                                          growth trajectory and a repeatable model,                                                  said, “We will continue to make Keppel a
                                                                                                                                          as well as have a more rationalised          To sharpen Keppel’s focus, the company’s      great place to work and offer Keppelites
                                                                                                                                          portfolio focusing on our key strengths      vision and mission statements will be         a purposeful and varied career. We have
                                                                                                                                          of engineering, project development,         shortened to “A trusted global company        been recognised by Forbes as being
                                                                                                                                          operating and managing specialised           building a sustainable future” and            among the world’s best employers. This
                                                                                                                                          assets, as well as capital and asset         “We deliver solutions for sustainable         year, we will roll out further initiatives,
                                                                                                                                          management. We will also continue to tap     urbanisation safely, responsibly and          including enhancing Keppelites’
                                                                                                                                          third party funds to grow our businesses.”   profitably”, respectively.                    physical and mental well-being. Group
 1                                                                                                                                                                                                                                   Human Resources will also look into
                                                                                                                                          Trusted and reliable company                 Keppel’s core values have also been           implementing flexible work arrangements,
                                                                                                                                          Mr Loh also shared the outcome of a          reviewed. Core values with similar themes     taking into account each business unit’s
                                                                                                                                          Keppel brand review, announced at            will be combined, and the eight core values   operational requirements.”

Engaging Keppelites around the world
                                                                                                                                                                                                                                                           1. Mr Loh Chin Hua, CEO
At the Global Keppelites Forum 2020, Mr Loh Chin Hua, CEO of Keppel Corporation,                                                                                                                                                                   2          of Keppel Corporation,
                                                                                                                                                                                                                                                              reiterated the Group’s
provided an overview of Keppel’s progress and plans for the future, and had a                                                                                                                                                                                 commitment to provide
candid dialogue with Keppelites around the world.                                                                                                                                                                                                             solutions for sustainable
                                                                                                                                                                                                                                                              urbanisation.

                                                                                                                                                                                                                                                           2. Keppelites were
                                                                                                                                                                                                                                                              enthusiastic in posing
                                                                                                                                                                                                                                                              questions during the
The sixth annual Group-wide townhall,       remain agile and nimble, stay relevant      improved processes through Autobots                                                                                                                                   fireside chat segment.
the Global Keppelites Forum (GKF), was      and retain a growth mindset in order to     and HaRmony. We now have a common                                                                                                                                     The questions
held on 6 February 2020 at the Suntec       seize these opportunities. Moving ahead,    digital spine running through the whole                                                                                                                               ranged from topics
                                                                                                                                                                                                                                                              on business strategy
Singapore Convention & Exhibition           our focus is on executing our strategy.”    organisation. Going forward, we will                                                                                                                                  and sustainability, to
Centre. The forum was attended by                                                       be able to gain more efficiencies with                                                                                                                                how Keppelites can
about 400 Keppelites in person and          Progress towards Vision 2020                process automation and continuous                                                                                                                                     contribute to the growth
                                                                                                                                                                                                                                                              of the company.
simultaneously broadcasted live to          Mr Loh provided an update of the Group’s    monitoring.”
about 2,100 Keppelites at 60 satellite      progress towards Vision 2020, which was
locations globally.                         launched in 2014. He said, “Collaboration   The Group has also made strides in
                                            is now more prevalent and increasingly a    safety, with zero fatalities in 2019, the first
In his address, Mr Loh Chin Hua,            part of the Keppel DNA. There are many      time this was achieved in over 25 years.
CEO of Keppel Corporation, shared           projects today involving collaboration.
that the Group had delivered resilient                                                  Mr Loh also emphasised Keppel’s
performance despite a challenging and       “We have also improved organisational       commitment to sustainability, which
volatile external environment. He said,     health, strengthened our succession         is now a core part of the company’s
“There are challenges and risks, but also   pipeline, enhanced controls, compliance     strategy. He shared, “We must make
opportunities. Keppel must continue to      and risk management as well as              sustainability our business, and create
16                                                                                                          SPECIAL FOCUS     17                                                                                                                        SPECIAL FOCUS

Valuable insights               Q: We emphasise our commitment                 to change along with it. When we are
                                to sustainability. Indeed, Keppel has          confronted with a rapidly changing
                                done a lot in terms of green buildings,        world, our business strategy will have to
Following Mr Loh’s address      environmental solutions etc. But we also       adapt accordingly. We need to have the
was a fireside chat segment,    have business units that are involved          right people with the right experience
where Keppelites were able      in building rigs and production assets         executing on the strategy.
to pose questions to Mr Loh     for the oil and gas industry. How do we
                                reconcile our focus on sustainability, with    It is important that we give people
either in person, or online     our involvement in the oil and gas sector?     a chance to learn and upgrade
through the Yammer platform.                                                   their skills. That is being done, and
                                LCH: While the world is moving                 something that we will continue to do.
                                towards cleaner energy, the reality is         There could be situations where people
Keppelite shares highlights
                                that the shift is not going to happen          may feel that they cannot make that
of the fireside chat segment,   overnight. There is still a need for fossil    transition, or they may feel that this
which was moderated by          fuels. We identified some years ago            is not the right thing for them to do.
Mr Ho Tong Yen, Director        that gas will be an important transition       Under such circumstances, it may be                                                                                                                             Mr Loh Chin Hua (left),
                                                                                                                                                                                                                                               CEO of Keppel Corporation,
                                fuel, and we started developing gas            unfortunate, but necessary for us to
of Group Corporate                                                                                                                                                                                                                             addressed questions from
                                solutions at Keppel Offshore & Marine          part company.                                                                                                                                                   Keppelites during the
Communications.                 (Keppel O&M). It is not by coincidence                                                                                                                                                                         fireside chat segment,
                                                                                                                                                                                                                                               moderated by Mr Ho
                                that I have put Keppel Renewable               Q: What can employees do to contribute                                                                                                                          Tong Yen (right), Director
                                Energy under Keppel O&M. A lot of              to the long-term growth of the company,                                                                                                                         of Group Corporate
                                the engineering capabilities that we           besides doing well in their day-to-day                                                                                                                          Communications.

                                have at Keppel O&M can be put to use           work?
                                in a different way. For other aspects
                                of our business, we endeavour to be            LCH: I would encourage all Keppelites
                                the most energy efficient. In terms of         to bring up good ideas, new ways or            circumstances of the day, is one of the         LCH: When I was young, I did not have         Service Commission (PSC) scholar.
                                our portfolio, we want to emphasise            more effective ways of doing things.           strengths of the Group.                         ambitions to become a lawyer or doctor.       When I joined the workforce, we had
                                renewables.                                    In the world that we are in today, it is                                                       I grew up in a simple setting. I recall, at   one of the first downturns in Singapore.
                                                                               important for leaders to listen more – it      Q: How big of an impact will the                a very young age, that a person deemed        Even for scholars, the government was
                                Q: People-focus is one of our core values.     doesn’t mean that we know everything.          COVID-19 outbreak have on Keppel?               to have done well in my kampung1 would        not able to give us any jobs. The silver
                                But at the same time, Keppel O&M has           If you see a trend that we are not             How will Keppel navigate through this?          be someone with a secondary school            lining was that this allowed us to apply
                                undergone significant rightsizing. Other       seeing, or if there is something that we                                                       qualification, working as a clerk. That was   for jobs in statutory boards. I got into
                                business units are also looking at value       can do better, we can always discuss it,       LCH: Safety is our core value, and the          the kind of role model that we had. Over      the Monetary Authority of Singapore
                                enhancement, with possible headcount           as we are open to ideas.                       most important thing is to keep our             time, when I was a student, I did think       and spent two weeks with them, before
                                reduction. How do we maintain a                                                               people safe. We have taken measures             about becoming a forensic scientist. But      moving to GIC.
                                balance between being people-focused,          Q: Amongst the many initiatives or plans       to do that. As for impact on Keppel             that may have more to do with the fact
                                with the need to manage headcount to           set in motion today, which do you expect       financially, the immediate impact is            that I enjoyed watching Hawaii Five-0 – I     At GIC, I was working in the equities
                                improve efficiency?                            to have the most significant impact to         not obvious as we do not own a lot of           never took any steps towards that.            department. I did fairly well, and
                                                                               the Group in the next 10 years?                hotels or retail properties, or food and                                                      after that I went to the real estate
                                LCH: In 2013, Keppel O&M achieved the                                                         beverage outlets, where you can see the         Looking back at my career, and even           department, even though my boss
                                Guinness World Record for delivering 21        LCH: I think Vision 2030 will be a very        impact immediately. But we must also be         before that when I was deciding where         then said that real estate was a small
                                jackup rigs. Shortly after, in 2014, we went   important plan. The document, when             prepared for the long haul. If this turns out   to go to school, I had taken some             department. At that time, everyone
                                from 100 miles an hour to hitting a wall. It   finalised, will chart our course in the next   to be a long, drawn-out affair, there will be   unusual paths. First, I did a degree in       wanted to do investments, which was
                                was a matter of survival. If we did not do     decade and more. The world is changing         an impact on the economy, and Keppel’s          real estate in New Zealand, which was         considered more glamorous. But I
                                our rightsizing, we may not have survived      rapidly. One of the key traits of Keppel is    businesses will not be immune from that.        not common, but that was how I could          chose to do asset management instead.
                                as a business.                                 that we have always reinvented ourselves.                                                      get a scholarship.                            You can see that I have taken slightly
                                                                               We used to own a bank. At the time             Q: Many Keppelites are curious to know                                                        different paths, and I don’t think that
                                Looking at the broader question of value       when we sold the bank, that contributed        more about their CEO. What was your             Later, I was supposed to work in the tax      that has hurt me.
                                enhancement across the Group, this is          50% of our profit. Some analysts back          ambition when you were a student?               department. However, I wanted to work
                                something that is necessary. The world         then wondered if Keppel could survive.         What path did you take to get to where          for GIC, though I was not able to join        LCH – Mr Loh Chin Hua,
                                of work has changed. With the advent           Not only did we survive, we prospered.         you are today?                                  them when I applied as I was a Public         CEO of Keppel Corporation
                                of robotics and artificial intelligence,       This ability to constantly make ourselves
                                all our jobs will be changed. We have          relevant, and reinvent ourselves to fit the    1. kampung: Malay word for village
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