Keppel T&T

Keppel T&T: 4Q14 net profit rose 10x y/y to $193.4m and operating profit 18x y/y to $250.9m, mostly the result of $238.5m gross gains on disposals of two data centres and divestments of a subsidiary and associated companies. Stripping disposal gains, 4Q14 operating profit of $12.3m is comparable to $10.9m in 4Q13. Normal operating revenue in 4Q expanded 57.6% y/y to $70.9m, boosted by contributions from Data Centre and Logistics divisions, but offset by lower revenue in the Investments division. Gross margins improved 1pp to 21.1% Higher taxation and non-controlling interests is in line with the disposal of subsidiary and dividends paid. For the full year, revenue rose 34.6% y/y to $224.6m and bottom line almost tripled to $246.7m due to disposal gains. Management emphasized the high occupancy at its Logistics facilities and encouraging throughput at integrated ports in China. Looking ahead, completion of and new contributions from warehouses at Tampines Logistics Park in Singapore, Vietnam Singapore Industrial Park in Vietnam and Tianjin Eco-city Distribution Centre in China is much anticipated. The company maintained final dividend of 3.5cents and proposed special dividend of 11.5cents, yielding 10.1% on yesterday’s close and 9.6% on today's open. The stock opened 5.7% higher today at $1.570. CIMB, the only broker that covers the stock, maintains Add with TP $1.93