Keppel Posts Its First-Ever Loss After Brazil Bribery Fine -- Update
By Saurabh Chaturvedi and Gaurav Raghuvanshi
SINGAPORE--Singapore conglomerate Keppel Corp. (BN4.SG) posted its first-ever quarterly net loss after its marine arm paid a penalty to settle a criminal investigation into its operations in Brazil.
In December, Keppel agreed to pay US$422 million to resolve a bribery probe in multiple countries related to its operations in Brazil. The earnings report included a 618.7 million Singapore dollars (US$473.4 million) one-off financial penalty and related legal, accounting and forensics costs, Keppel said.
Keppel, one of the world's biggest rig builders, entered into a deferred prosecution agreement with U.S. authorities charging the firm with conspiracy to violate the Foreign Corrupt Practices Act, which bars the use of bribes to foreign officials to get or keep business. It also reached related settlements with Brazilian and Singaporean authorities, U.S. prosecutors said at the time.
The resolution of the investigation brings to an end a "painful chapter" for Keppel, Chief Executive Loh Chin Hua said Thursday. "We have put in place effective compliance controls to ensure that this does not happen again," he said.
Mr. Loh added that Keppel will work to build a more disciplined and sustainable business.
Analysts and the market say they expect higher global crude-oil prices to kick-start orders for drilling rigs. In anticipation of that, shares of Keppel and its local rival Sembcorp Marine Ltd. (S51.SG) have risen sharply in recent months. Keppel shares are up nearly 17% since the beginning of the year, while Sembcorp Marine has jumped nearly 40%.
Net loss for the October-December quarter was S$495.8 million, compared with a profit of S$143.1 million a year ago, Keppel said in a stock-exchange filing Thursday. Its revenue declined 20% to S$1.54 billion (US$1.18 billion) from S$1.94 billion.
For the full year, net profit fell to S$217 million from S$784 million in 2016, Keppel said. Excluding the penalty, profit would have risen 7% last year, it said.
While the offshore and marine division reported a S$835 million loss last year, profit at Keppel's property division rose 10% to S$685 million. The infrastructure business returned a 33% growth in profit last year, at S$132 million.
Write to Saurabh Chaturvedi at Saurabh.Chaturvedi@wsj.com and Gaurav Raghuvanshi at email@example.com
(END) Dow Jones Newswires
January 25, 2018 07:19 ET (12:19 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.