Keppel Ltd. (BN4.SI) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. Welcome to the conference for Keppel Corporation's Second Half and Full Year Financial Results for 2022. We have on the panel this evening from your left are Mr. Manjot Singh Mann, CEO of M1; Ms. Cindy Lim, CEO of Keppel Infrastructure; Mr. Chris Ong, CEO of Keppel Offshore & Marine; Mr. Chan Hon Chew, CFO of Keppel Corporation; Mr. Loh Chin Hua, CEO of Keppel Corporation Ms. Christina Tan, CEO of Keppel Capital; Mr. Louis Lim, CEO of Keppel Land; and Mr. Thomas Pang, CEO of Keppel Telecommunications and Transportation. We will begin the session with presentations by Mr. Loh and Mr. Chan, followed by the question-and-answer session. Mr. Lo, over to you, please.

Thank you. Good evening. Welcome to the webcast on Keppel Corporation's Second Half and Full Year 2022 results. 2022 was a challenging year for the global economy, marked by the war in Ukraine, heightened geopolitical tensions, slowing global growth, inflation and rising interest rates. The International Monetary Fund has projected that global growth is expected to slow from 5.9% in 2021 to 4.4% in 2022 and 3.8% in 2023. Amidst a difficult environment, we continue to accelerate Keppel's Vision 2030 transformation, simplifying and focusing our business while executing our asset-light strategy. We completed the divestment of Keppel Logistics and are currently on the final stages of executing the proposed combination of Keppel Offshore and Marine with Sembcorp Marine and resolution of our legacy rigs and associated receivables. The offshore and marine transactions have received strong support from Keppel's shareholders at our Extraordinary General Meeting last December. While Sembcorp Marine has announced that you will be holding its AGM on the 16th February to seek its shareholders' approval. Amidst improving conditions in the O&M sector, we are optimistic that the combined entity with a very strong order book and synergies realized from integration will be well positioned to seize opportunities in the evolving landscape. In 2022, Keppel O&M achieved an annual revenue of $2.8 billion, its highest in 6 years. During the year, Keppel O&M secured about $8.1 billion of new orders, bringing its net order book to $11 billion at the end of 2022, which is at the highest level since 2007. This includes the FPSO projects with Petrobras, which are currently tracking on schedule and within budget. We have also made good progress in putting our legacy rigs to use all the available KFLs B class jackup rigs in the fleet have secured bareboat charters, while we continue to receive active inquiries for the remaining legacy rigs. With higher utilization and day rates, we have, based on the value in use assessment conducted by our independent advisers, written back part of the impairments, which had been made for the legacy rig assets in 2020 when oil price had fallen sharply following the COVID-19 outbreak. As a result of this write-back, the asset co-vendor notes will increase, bringing the total realizable value to Keppel from the O&M transactions from $9.05 billion to $9.35 billion. Had the proposed transactions being completed at the end of financial year 2022, we would have booked a pro forma disposal gain of approximately $3.4 billion or $1.94 per Keppel Corporation share from the Samco Marine shares received. On the same pro forma basis, this gain would have increased our net tangible assets as at end 2022 by approximately $2.05 per share, including other adjustments from the reported $5.51 per share to $7.56 per share both transactions. Upon the completion of the transaction, we will distribute in species, 19.1 Sembcorp Marine shares to our shareholders for every Keppel Corporation share they hold. The distribution in specie has an implied value of $2.33 per Keppel Corp share based on Sembcorp Marine's volume-weighted average price of $0.122 per share when the transaction was announced in April 2022. Following the distribution in species, our pro forma NTA would be reduced from 67.56 to 5.23 per share, which is quite close to our reported NTA of $5.51 per share at the end of 2022. In short, distribution -- this distribution in species is backed by the disposal gain that will be booked post transaction, our NTA will only be marginally reduced. Of course, the gain as well as the final value of the distribution in specie will depend on the actual value of Sembcorp Marine's share when it starts trading on the SGX post transaction. Based on Sembcorp Marine's closing share price of $0.141 last evening, the implied value of our distribution in species will be even higher at $2.69 per Keppel Corp share. Including the new shares that we will receive as well as the vendor notes from the sale of the legacy rigs to Asset Co and the out-of-scope assets, we will, in total, unlock close to $9.7 billion from the transactions. This is equivalent to EUR 5.52 per share in value. Just as important, the completion of the O&M transactions will accelerate Keppel's transformation from a conglomerate of diverse parts into a global asset manager and operator with strong capabilities in energy and environment, urban development and connectivity, which is well positioned to seize opportunities to creating solutions for sustainable future. In the midst of an inflationary environment, we see strong demand from investors for real assets with cash flows, which the Keppel Group is able to develop, operate and manage. Later this year, we will share more details on the next phase of our transformation plans. Keppel delivered robust performance in financial year 2022, achieving a net profit of $927 million, boosted by stronger results in asset management and Energy & Environment. Net profit was 9% lower compared to $1.02 billion in financial year 2021, mainly due to lower earnings in urban development as well as provisions for specific projects at Keppel O&M's yard in the U.S., which were partly offset by the partial write-back of impairments for our legacy rigs. 2021 had also benefited from a higher fair value gain of $277 million from our investment in Ambition AESC. Our CFO, Hon Chew, will elaborate more on the financials later. Return on equity was 8.1% for financial year 2022 compared to 9.1% for financial year 2021. Free cash flow was $408 million in financial year 2022 compared to an inflow of $1.76 billion due mainly to lower divestment proceeds. Net gearing remained stable at 0.78x as at end December 2022 compared to 0.79x as at end September 2022. We have also continued to strengthen our business resilience amidst rising interest rates. As at end of last year, about 67% of the group's borrowings were on fixed rates with an average interest cost of 3.24% and weighted tenor of about 3 years. In appreciation of the support and confidence of our shareholders, the Board of Directors has proposed a final cash dividend of $0.18 per share for financial year 2022 to be paid on 10th May 2023. Together with the interim cash dividend of $0.15 per share, we will be paying out a total cash dividend of $0.33 per share to shareholders for the whole of 2022, which is the same as the $0.33 per share in 2021. I -- this does not include the additional 19.1 Sembcorp Marine shares, which I had mentioned earlier that we will distribute in species for every Keppel Corporation share held when the O&M transaction is successfully completed. Assuming the EGM for the acquisition by Sembcorp Marine is passed by their shareholders on 16th of February. It is currently anticipated that Keppel shareholders will be credited they are entitlement of the share distribution within a week or so of the ex-dividend date, which will be announced by Keppel in due course. We have emphasized our plans to move away from order book business and lumpy property development profits and focus on growing recurring income. For financial year 2022, recurring income made up $560 million or 67% of the group's earnings, an increase of 114% from the $262 million in financial year 2021. Since the start of our asset monetization program in October 2020, we have made good progress with over $4.6 billion announced to date. This puts us well on track to exceed the higher end of our $3 billion to $5 billion target by the end of 2023. As I've said before, we will not stop at $5 billion, but we'll continue to unlock capital, which can be used to invest in our growth engines alongside co-investors and also reward our shareholders. We have made good progress in harnessing our asset-light model for growth with the announcement of about $2.8 billion worth of energy and environment and sustainable urban renewal related investments in 2022, jointly undertaken by Keppel together with the private funds and our business trusts managed by Keppel Capital. This allows us to make large investments in energy transition-related projects without pushing up our gearing significantly. We plan to pursue more of such joint investments going forward. The Asset Management segment delivered improved earnings of $311 million in financial year 2022 compared to $301 million the year earlier, and it's the latest -- is the largest contributor to the group's net profit. As we transform to be a global asset manager and operator, asset management would not just be a vertical within the group, but a key focus of Keppel's business and the horizontal that pulls the other business units together to deliver value as one integrated company. In 2022, Keppel Capital completed more than $7.7 billion in acquisitions and divestments across its REITs, trust and private funds. Our asset management fees grew about 15% year-on-year to $267 million, further boosting the group's recurring income. During the year, we also launched the new Keppel call Infrastructure Fund and Keppel's sustainable urban renewable fund, which are attracting positive interest from global investors. Having achieved the assets under management target of $15 billion at end of 2022, we will work towards our next AUM target of $200 billion. In our Energy & Environment business, Keppel Infrastructure delivered strong performance, more than doubling its earnings year-on-year to $241 million, driven by higher contributions from electricity and gas sales, Keppel Segher's overseas projects and an associated company in Europe. During the year, we actively expanded our business in sustainability-related solutions in line with our Vision 2030 strategy. This includes commencing Singapore's first renewable energy import, developing Singapore's first hydrogen-ready power plant and gearing up for the low-carbon economy through exploring green ammonia and green hydrogen solutions with international partners. We are also expanding our provision of energy as a service for commercial and industrial customers as we both grow recurring income and contribute to global decarbonization efforts. Our announced portfolio of renewable energy assets has more than doubled to 2.6 gigawatts, including projects under development compared to 1.1 gigawatts at the start of 2022 on track towards our target of 7 gigawatts by 2030. Looking ahead, we'll continue to tap our asset-light model and harness Keppel Infrastructure's strong track record to seize growth opportunities in the energy and environment sector. Our urban development business was affected by headwinds in our key markets, especially China, but we're still able to put in a creditable performance. Asset monetization remained healthy with the divestment of 2 projects in Shanghai, though it was lower than in 2021. China both its Zero Covid policy should see stronger domestic demand and higher growth. The Chinese authorities have also announced constructive policies, which should benefit the real estate sector. Keppel Land will continue its push to grow recurring income and provide real estate as a service solutions to enhance our relevance in a world characterized by flexible work arrangements, climate action and where digitalization is redefining the built environment. We are seizing opportunities in sustainable urban renewal and senior living as demonstrated by our recent acquisition of an office tower in Seoul and a senior living facility in Nanjing. In our Connectivity segment, M1's earnings grew significantly, rising 32% year-on-year to $75 million in financial year 2022, underpinned by its transformation from a traditional telco to a cloud native connectivity platform. roaming and prepaid revenues have also risen with the progressive reopening of economies. M1 is expanding its enterprise solutions and developing 5G business applications as it captures new profit pools. The enterprise business has been growing steadily, making up about 33% of M1's revenue in 2022, up from 20% in 2020. We expect profit contributions to improve in the coming years as M1 migrates customers to its new cloud-native digital platform, which allows subscribers to enjoy its new 5G plans and cloud services such as cloud gaming, amongst others, improves customer acquisition and lower its cost to serve. In the data center business, Keppel is uniquely positioned to provide integrated end-to-end solutions from the provision of clean energy to the development and operation of high-quality green data centers to the raising of funds to invest in greenfield developments to the monetization of stabilized assets through Keppel DC REIT. In financial year 2022, our integrated data center business yielded total earnings of $66 million. We have also continued to grow our data center portfolio with acquisitions in China and the U.K. Looking ahead, we see the trend of increasing digitalization, including cloud computing, artificial intelligence and the metaverse, generating further demand for the group's digital connectivity solutions. To conclude, 2023 will be an important year for Keppel as we take the next leap forward in our Vision 2030 trajectory. With sustainability at the core of our strategy, we will continue to both run our business sustainably and also make sustainability, our business through the solutions we provide, which can help the world progress towards net 0. We are encouraged to see our sustainability efforts recognized with the inclusion of Keppel Corporation in the Dow Jones Sustainability World and Asia Pacific indices as well as the retention of our AAA rating in the Morgan Stanley Capital Index ESG ratings. The Keppel of tomorrow will work towards being a leading global asset manager and operator focus on harnessing the group's different capabilities to create solutions for a sustainable future. With the growing global focus on sustainable development and climate change, I believe Keppel is in the right space at the right time. While the macro environment is expected to remain challenging, I'm confident that we can build on the momentum Keppel has achieved to deliver strong value for all our stakeholders. Our CFO will now take you through the group's financial performance. Over to you, Hon.

Thank you, Hua. And a very good evening to everyone. I shall now take you through the group's financial performance. For the full year, the group's net profit, including discontinued operations, decreased 9% year-on-year to $927 million. All segments were profitable with improved year-on-year performance from Energy & Environment and Asset Management. ROE was 8.1% as compared to 9.1% last year. In 2022, Asset Management was the largest contributor at $311 million net profit, representing about 1/3 of the group's earnings. Despite the headwinds in some markets, our urban development business continued to contribute significantly, accounting for $282 million or 30% of the group's profits. -- reversing the net loss in the prior year. Energy & Environment contributed a net profit of $172 million or 19% of the group's bottom line. Connectivity and Corporate and others accounted for 8% of the group's profit. Discontinued operations registered a net profit of $88 million compared to 2021 net loss of $225 million. I will further elaborate on the performance of each segment later on. Beyond profitability, the group has maintained a healthy balance sheet. Net gearing was 0.78x as at the end of December 2022. Compared to the end of 2021, net debt has increased mainly due to investments, dividend payments as well as the $500 million share buyback program completed during the year, partly offset by proceeds from divestments. Capital employed decreased as a result of dividend payments, effects of share buybacks and other reserve movements, which were partly offset by profits earned during the year. Free cash outflow was $408 million as compared to the free cash inflow of $1.76 billion in 2021. This was largely due to lower divestment proceeds from asset monetization completed and higher investments made during the year. During the year, the group invested in several energy and environment and sustainable urban renewable-related investments, including clean tech renewable assets, which is a solar platform, Eco-Management Korea Holdings, which is a South Korean waste management company and office building in South Korea, which the group will look into incorporating sustainability features. The group continued to scale up and expand its sources of recurring income. Recurring income increased $298 million year-on-year to $560 million. This was underpinned by higher earnings achieved by the Power and Renewables business and M1, stronger share of results from an associated company in Europe under Keppel Infrastructure and higher contributions from the stakes in the REITs and trusts that we own. Earnings from development for sale were lower year-on-year, mainly due to lower contributions from trading projects in China and lower gains from en bloc sales. This arose largely as a result of the slowdown in the Chinese economy and China's Zero Covid policy, which have affected home sales, the completion and handover of units as well as asset monetization. However, the Chinese economy is expected to recover in the coming months following the relaxation of Covid restrictions. The implementation of policies targeted at both property developers and home buyers should also help the bolster market sentiments. Although lower year-on-year, the group continued to record healthy revaluation gains on our investment properties and data centers as well as fair value gains on investments in 2022. Impairments in 2022 were much lower than the prior year when the group recognized provisions related to CrisEnergy exposure. Moving on to the performance by segment. Energy & Environment's net profit for the year was $260 million, a sharp reversal from the net loss of $414 million in 2021, which had included an impairment of $318 million related to the group's exposure to Chris Energy, partially offset by share of Flotel's net restructuring gain of $215 million. Net profit from our infrastructure business more than doubled year-on-year to $241 million, driven by higher electricity and gas sales and contributions from Keppel Sages projects abroad as well as higher share of results from an associated company in Europe, as mentioned earlier. This continued operations recorded net profit of $88 million as compared to a net loss of $225 million in the previous year. Keppel O&M recorded healthy revenue growth of 39% due to revenue recognition from new projects and higher progressive revenue recognition of existing projects. However, Op Co recorded a net loss of $143 million largely due to provisions for cost overruns on certain ongoing projects in Keppel O&M's yard in the U.S., mainly arising from a shortage of manpower, higher-than-expected labor costs as well as COVID-related supply chain disruptions. Apart from the yard in the U.S., the projects in capital and other yards, including the FPSO projects with Petrobras are progressing well and are on track and within budget. Keppel O&M continues to build on the strengths, having secured $8.1 billion of new orders in 2022, which are expected to yield reasonable margins. As at year-end, Keppel O&M's net order book stood at $11 billion, the highest level since the highest level since 2007. Notably, significant deposits were also received for the newbuild FPSO PAT and BA3 projects, which have contributed to Op Co's healthy net cash position as at December 2022. With improving offshore and marine market conditions, including recovery of oil prices, higher rig utilization and day rates contracted and supported by the value in use assessment conducted by our independent advisers. The group has partially written back $293 million of impairments, which had been made in 2020 for certain legacy REIT assets. As mentioned during the first half of 2022 results briefing, following the definitive agreements for the proposed combination of KOM and Sembcorp Marine and the Asset Co transaction. The group has also ceased depreciation for the relevant assets that have been classified under disposal group held for sale. This amounted to about $71 million for the year 2022. As such, discontinued operations recorded net profit of $88 million in 2022, mainly from the partial write-back in respect of certain legacy rig assets impairment made in 2020 and cessation of the relevant depreciation, partly offset by Opcos net loss, largely due to cost overrun provisions for certain ongoing projects in the U.S. here. Urban Development's net profit was declined year-on-year at $282 million, mainly due to reduced contributions from China property trading projects and lower fair value gains from investment properties as well as lower gains from en-bloc sales. Keppel Land completed the disposal of upview and Sheshan Viveve projects in Shanghai in 2022, which booked a gain of $20 million. This is lower than compared to the recognition of $338 million in gains from the disposal of the Donna project in Vietnam, Serenity Veles project in Chengdu and China Chip project in Nanjing, and divestment of a partial interest in TininFuxiRio Estate Development Company Limited in 2021. Contribution from the Sino-Singapore TNT Ecocity was lower year-on-year as there were no land sales in 2022 compared to the sale of a commercial land and residential plot in 2021. However, market sentiments are improving following the relaxation of COVID-related restrictions. The connectivity segment recorded a net profit of $37 million, which was lower year-on-year as 2021 benefited from gains from the disposal of interest in Keppel Logistics Foshan and Wuhu Shanshan Port Company Limited in 2021. nonmobile and enterprise revenue grew as it continues to expand its enterprise business and 5G offerings. Net profit from M1 was 32% higher at $75 million on the back of better operating results, underpinned by higher revenue and lower depreciation and amortization expenses, which were partly offset by network service fee expenses. The group's one DC business, comprising Keppel data centers working in collaboration with the private funds and Capa DC REIT managed by Keppel Capital, contributed total earnings of about $66 million, of which $62 million is reported under the asset management. Performance of the data center business and the connectivity segment improved year-on-year, mainly due to higher fee income, partly offset by lower fair value gains from data centers. Asset Management achieved a 20% increase in revenue, underpinned by higher fee income arising from successful acquisitions completed during the year. Net profit rose by $10 million to $311 million, backed by higher top line and higher fair value gains on investment properties under Keppel REIT. These were partly offset by lower fair value gains on data centers under Capire and our private funds as well as mark-to-market losses from investments as compared to mark-to-market gains recognized in 2021. Contribution from corporate and others was lower year-on-year at $37 million. Our investments in new technology and startups continue to yield good returns that supported the $91 million of fair value gains recorded in 2022, mainly from investments such as Envision AESC Global Investments and Fifth Wall. Investment income was lower due to absence of distribution of income from E-Group partners like TinmFund 1, which matured in 2021. With that, we have come to the end of the presentation, and I shall hand the time back to CEO for Q&A. Thank you.

[Operator Instructions] We have a first question. This is from John Lee, retail shareholder in Singapore. Mr. Loh, can you elaborate on your point about Keppel's NTA rising first when the Com SMM transaction is approved and completed, and then falling after the Sembcorp Marine shares are distributed to shareholders. Does this mean that Keppel's share price will rise and then for…

Okay. Maybe let me be clear. All this will all take place more or less at the same time. So, in other words, at completion of the transaction. So, this is all assuming that the shareholders of Sembcorp Marine approves the resolution, place in front of them at their AGM on the 16th of June. So, when the completion takes place, we will, as I mentioned in my remarks -- opening remarks, will make a significant gain from the transaction, which will result in our NTA rising first. And then, of course, we are distributing 19.1 shares per KCL shares, and that will then result in the NTA falling. The net of it all is that the NTA will be more or less just slightly below what our NTA is as at the end of December 2022. The key difference here is that unlike distribution from our portfolio to shareholders in species where there is no accompanying transaction, you would have then led to our NTA falling by the value of the distribution. So, in this case, the value of the distribution is backed by the gains that we will make or we were booked when the transaction is completed with Sembcorp Marine –

This is from Nicholas Lim, investor in Singapore. Congratulations on the good results in spite of the global economic headwinds. I have 2 questions. First, on dividends. The final dividend is lower than last year despite an increase in the company's recurring income, should we view $0.33 as the minimal annual dividend by Sembcorp? The second question, ROE. Keppel's ROE of 8.1% is still some way off your ROE target of 15% from Vision 2030. Could you share what steps you are taking to achieve your target targeted 15% sooner?

So maybe let me explain. I think whilst we don't have a specific dividend policy, the Board and the management is well aware that dividends is a very important part of the consideration for our shareholders. And we have so far in recent years, endeavored to pay somewhere between 50% to 60% of our earnings. So, this is how we arrive at the $0.33 -- I mean, the final dividend of $0.18, making a total of $0.33 for the year. As the group's recurring income goes up, as you have noted, which is also part of our Vision 2030. It will give us more confidence to pay more of our earnings in dividends. But I wouldn't say that this $0.33 is a minimal annual dividend. It will all depend on how successful we are to continue on our Vision 2030 to improve the quality of our earnings as well as, of course, the absolute amount of the earnings going forward. On your second question, I think that's a fair point. We are still some way off the 15% that we're working towards that even in the capital that you see today. You can see that through the asset monetization, we are actually creating a lot more headroom in our balance sheet to take on growth -- new growth opportunities in energy transition in real estate as a service and of course, in connectivity solutions and of course, in asset management as well. So over time, as we move away from having assets in our balance sheet that are sitting there, such as our land bank, which may not produce returns. In fact, the land banks will have a certain holding costs attached to them. And we replace them by new investments with recurring income. I believe our target -- our ROE will continue to rise. So, we are working towards that 15%, and we remain confident that we will achieve that well within the Vision 2030.

Next question? Okay. This is from Terence Chua of Phillip Securities. Can I find out if the fine paid by Keppel had an impact on the dividend distribution this year? Hons, you want to.

Yes. Sure. I think as we have announced after taking into account the crediting of the USD 52.8 billion, which the [indiscernible] chambers of Singapore and PID have agreed to. The net finite just paid by KOM was actually USD 22 million. So, there is really no material impact on and as a result, there's also no material impact on the decision regarding the dividend distribution this year.

Next question is from James Osman of Citi, Singapore.

Could you share what was the earnings contribution from the new energy and environment investments that were made in financial year 2022 as well as expectations on how these investments could contribute to the segment's growth in financial year '23 and beyond, which projects or investments are you most positive on in terms of potential.

Hon Chew, are you able to address this?

I think we -- as we mentioned earlier, there are a number of investments that were made during the year. But I don't think it's inevitable to expect these investments to make material returns within such a short span of time. Okay. So, some of these investments was made during the year. So -- and of course, it is also investments that we make in -- jointly with some of the private funds and the trust that we have. So over time, we would expect that we will get our share of earnings from these investments or investment dividend income, depending on the type of investment it is, whether it's an associate or an investment. But on top of that, we will also be getting, of course, our asset management fees, et cetera. So this will all add to the returns and the recurring income that the group makes. The next question is which projects or investment are you most positive on in terms of potential. I guess you're referring to new projects because, obviously, we are positive on the projects that we have gone into. But maybe I can invite Christina, do you want to share a bit about what are some of the things that Keppel Capital is excited about, despite the very difficult environment.

No. Yes. Thanks. Regarding our investments, I think we are really happy that we have made investments into renewables projects in Europe as well as in Asia. I think the investments referred to like in clean tech, where we have solar platforms in India in the C&I space as well as in the Southeast Asia. I think that's doing really well. So we are very positive about that with the -- unfortunately, with the war as well. I think our energy prices have actually gone up substantially in Europe. So, our investments in onshore wind in the Nordics as well as offshore wind in Germany has actually done really well compared to our underwriting. It's probably about 3x what we have underwritten. So, we expect that these segments of investments are really something that we can look forward to in terms of contributions to our earnings. Thank you.

Thank you, Chris. Okay. We have a question now from Ms. Lim Suki of CIMB in Singapore. Okay. Well, she has quite a number of questions. So, I will try to address them one at a time. So. first question, which by itself has, okay, what is your ROE target ROE in financial year '23. I guess we don't give you a specific target for in financial year '23 because that would be like giving you a forecast of what our earnings is going to be? Second question, why this continued profit came down half-on-half to $24 million in second half '22 versus $63 million in first half '23. -- you can decipher a shorthand...

Let me try I think if you look at the second half of this continued indeed, I think as you have already pointed out, there were some provisions made for cost overruns, which we have already kind of mentioned in our opening address. As you know, every financial year, as we closed the books, we will have to do a very extensive review of our cost for each of the projects, looking at cost incurred to date and projection of what are the future costs to complete those contracts, we need to make certain provisions for any overrun that we may expect to incur in future. And given some of the increase in labor costs and especially in this case, our yard in the U.S. As a result, we had to make certain provisions. And as you know, these are live projects and as we speak, the team is also working with the customers, customers to try and recover some of these cost overruns. So due to the sensitivities, we will not be able to tell you which projects and how much. But suffice to say that if you look at Op Co, as I have covered in my opening address, Op Co has made a loss of $143 million. Op Co would have made a profit, if not for these provisions that we made for the second half. I hope that helps to give -- to add some color to give you a flavor of the second half performance for the discount.

I think you answered a question, how much was the provision made for the cost overrun and what project it was?

Any more provision ahead, of course, you come... So, as we mentioned, we actually did a very, very extensive review of all the projects for the financial year-end. So we can say that at this point in time, we do not expect any additional provisions to be made for these projects. And I've also covered in the opening address that this is specific to our yard in the U.S. All the other projects in other yards, we don't have the same issue. We don't have to make such a provision. And the other projects are expected to be on budget, on time.