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Keppel T&T's margins are likely to stay depressed ahead of the opening of the new facilities in FY14-15
Keppel T&T margin slump could extend till FY14-15
Logistic segment margin looking especially weak.
According to CIMB's forecasts, Keppel T&T's margins "are likely to stay depressed ahead of the opening of the new facilities in FY14-15 as staff and building costs are incurred before any operating earnings can be generated."
"We believe the logistics segment’s margins will remain depressed for a longer period of time as the four new warehouses are of a larger scale and will take longer to build," it added.
But the data centre segment offers some relief; most of the staff for the Keppel Datahub 2 have already been hired and margins are likely to improve in 1H14 as the new facility starts generating income, according to CIMB.
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