Keppel (BN4) Q2 2024 earnings summary

Executive summary

• Net profit from continuing operations (excluding legacy O&M) rose 7% year-on-year to SGD 513 million in 1H24, with all segments profitable and Infrastructure and Connectivity offsetting Real Estate decline; annualised ROE improved to 9.8% from 8.7% in 1H23.

• Asset management earnings more than doubled to SGD 75 million; FUM surged 55% to SGD 85 billion, driven by organic growth and the acquisition of 50% of Aermont Capital.

• Asset monetization reached SGD 280 million in 1H24, totaling over SGD 5.6 billion since October 2020; interim monetization target set at SGD 10–12 billion by end-2026.

• Achieved over SGD 50 million in recurring annual cost savings since 2023, on track for SGD 60–70 million by end-2026.

• Board approved interim cash dividend of SGD 0.15 per share, same as last year, reflecting confidence in growth trajectory.

Financial highlights

• Net profit from continuing operations (including legacy O&M) was SGD 304 million, down from SGD 3,627 million in 1H23 due to higher losses from legacy assets and absence of discontinued operations gains.

• Revenue declined 13% year-on-year to SGD 3,224 million in 1H24, mainly due to lower contributions from Infrastructure and Real Estate.

• Recurring income rose 14% year-on-year to SGD 388 million, now 76% of net profit.

• Free cash outflow improved to SGD 216 million in 1H24 from SGD 732 million in 1H23.

• Earnings per share from continuing operations (excluding legacy O&M) rose 5% to 28.2 cents; including legacy O&M, EPS fell 33% to 16.7 cents.

Outlook and guidance

• Confident in achieving SGD 100 billion FUM by 2026 and SGD 200 billion by 2030, with strong investor interest in new funds for data centers, education, and private credit.

• Asset monetization programme aims for cumulative SGD 10–12 billion by end-2026; SGD 5.6 billion achieved to date.

• Targeting recurring EBITDA from long-term technology and energy services contracts to exceed SGD 100 million by 2027.

• Planned launches for three new funds in 2H24, including a US$2 billion Data Centre Fund III.

• Real Estate Division focusing on asset-light, recurring income streams and sustainable urban renewal.