The global economy has shown some signs of recovery this past quarter. The Chinese economy is now widely expected to grow beyond 8% this year. Housing construction in the US rose in August to the highest level in nine months. Europe appears to be on track to exit the recession in the third quarter. In Singapore, the government has just revised its growth forecast for the economy upwards, to the range of minus 2.5% to minus 2% for 2009. Overall, although sustained recovery in private consumption and investment is still needed to support the positive momentum, there is a cautious optimism for modest growth in the near term.
Against this backdrop, I am happy to report that Keppel Corporation has turned in yet another solid performance in the third quarter. PATMI for 3Q’09 grew 17% to $319m. For the first nine months of 2009, PATMI grew 11% to $922m while annualized ROE reached 23%, the highest ever for the company.
On the back of improving economic data, the International Energy Agency has adjusted its global oil demand forecast upwards for both 2009 and 2010. In particular, the 2010 forecast of 86.1 million barrels a day is an encouraging signal. With oil prices staying above $70 per barrel, we are cautiously optimistic that we will capture new orders that will be meaningful to us. While we are working hard to secure new contracts to grow our current orderbook of $6b, our focus is on ensuring that we execute our existing orders well, on time and on budget.
In property, sentiments have improved significantly in our key markets in Asia, and this is reflected in the healthy sales figures in all of our residential launches for the quarter. The Group has also been actively improving our balance sheet this year. Keppel Land completed its rights issue earlier this year. K-REIT Asia’s rights issue was approved by its shareholders yesterday and the exercise is expected to be completed in November. These moves will position us well to seize opportunities as they arise. With the recent ratification by the Evergro shareholders, Keppel is also on track to privatize the company completely, and we will look at ways to continue growing our business in second-tier cities in China.
Keppel also sees tremendous potential in the environmental engineering business. As such, we will leverage our collective strength and advantage as a Group to capture value in our chosen niches in this business. For a start, we have boosted resources at Keppel Integrated Engineering with the talents and experience from Keppel Offshore & Marine. This has augmented business development and project execution capabilities in KIE in pace with its growing portfolio of waste-to-energy and water projects.
The external environment is certainly improving and in all our businesses, Keppel is well poised to ride on our robust financial position and track record to actively seek out growth opportunities. However, this will be done with the financial discipline we have in place as well as selectively to ensure sustainable earnings growth for the Group.