[SINGAPORE] Asset manager Keppel saw net profit rise 24.2 per cent on the year to S$377.7 million for the first half ended Jun 30, driven by growth in its real estate segment.
The profit growth came even as Keppel’s top line fell 5.2 per cent to S$3.1 billion. Revenue from the infrastructure segment was down by 12 per cent to S$2 billion, with lower net generation in the integrated power business.
However, revenue from the real estate segment rose by S$29 million – to S$95 million – on the back of contributions from an India office project acquired last year, as well as a senior living operator in the US that was consolidated in March.
Telco M1 also recorded higher enterprise revenue, with contributions from the newly acquired ADG in Vietnam, as well as higher handset and equipment sales, even as mobile revenue fell.
Keppel announced an interim dividend of S$0.15 per share – unchanged from the year-ago period, as well as a S$500 million share buyback programme. The repurchased shares will be used in part for the annual vesting of employee share plans, and as possible currency for future merger and acquisition activities.
In its earnings statement, Keppel announced that it has identified a S$14.4 billion portfolio of non-core assets for divestment. Excluding the impact of this portfolio, its net profit would have risen 25 per cent to S$431 million.
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The divestment portfolio comprises legacy offshore and marine assets, residential landbank, selected property developments and investment properties, and S$2.9 billion of embedded cash and receivables. It also includes hospitality and logistics assets and other non-core investments.
There is “significant value” to be unlocked from releasing the part of the balance sheet that is not required by the “New Keppel”, said the company’s chief executive Loh Chin Hua in an earnings statement.
The company also announced the divestment of S$915 million of assets in the year to date, raising the cumulative total to S$7.8 billion since the programme began in October 2020.
The non-core assets are no longer aligned with Keppel’s asset-light, recurring income-focused strategy, even though many are profitable, such as residential landbanks carried at historical costs.
Keppel’s funds under management (FUM) stood at S$91 billion as at end-June, while asset management fees amounted to S$195 million.
Keppel’s private funds – such as those for data centres, education assets and sustainable urban renewal – have raised a combined FUM of S$4.7 billion year to date.
Keppel shares ended Wednesday at S$8.18, up S$0.02 or 0.3 per cent.
