Keppel Ltd 1H operating profit S$616.7m

Keppel Ltd 1H operating profit S$616.7m

Singapore-based Keppel Ltd reported a robust 1H operating profit of S$616.7 million, marking a 24.2% year-on-year increase. The results were driven primarily by the real estate segment, which saw a revenue rise of S$29 million to S$95 million. This growth was attributed to contributions from an India office project acquired last year and a senior living operator in the US that was consolidated in March [1].

Despite a 5.2% decline in top-line revenue to S$3.1 billion, Keppel's infrastructure segment saw a 12% drop in revenue to S$2 billion, largely due to lower net generation in the integrated power business. However, the telecommunication arm, M1, recorded higher enterprise revenue, with contributions from the newly acquired ADG in Vietnam and increased handset and equipment sales, despite a fall in mobile revenue [1].

Keppel announced an interim dividend of S$0.15 per share, unchanged from the year-ago period, and a S$500 million share buyback programme. The repurchased shares will be used for employee share plans and potential future merger and acquisition activities [1].

In its earnings statement, Keppel highlighted a S$14.4 billion portfolio of non-core assets earmarked for divestment. This portfolio includes legacy offshore and marine assets, residential landbank, selected property developments, investment properties, and S$2.9 billion of embedded cash and receivables, among others. Excluding this portfolio, Keppel's net profit would have risen 25% to S$431 million [1].

The company has already divested S$915 million worth of assets in the year to date, raising the cumulative total to S$7.8 billion since the programme began in October 2020 [1].

Keppel's funds under management (FUM) stood at S$91 billion as of end-June, while asset management fees amounted to S$195 million. Additionally, private funds for data centers, education assets, and sustainable urban renewal raised a combined FUM of S$4.7 billion year to date [1].

Keppel shares ended Wednesday at S$8.18, up S$0.02 or 0.3% [1].

References:
[1] https://www.businesstimes.com.sg/companies-markets/keppel-h1-profit-rises-24-2-s377-7-million-seeks-monetise-s14-4-billion-non-core-assets