Keppel Limited has reported total earnings of $304.1 million for the 1HFY2024 ended June 30, 91.6% lower y-o-y. The lower earnings were due to the absence of the $3.3 billion divestment gain from the group’s sale of its offshore and marine (O&M) unit in the corresponding period the year before.
Earnings per share (EPS) stood at 16.7 cents.
On a same-scale basis, the group’s earnings from continuing operations fell by 31.6% y-o-y from $444.9 million in the 1HFY2023.
1HFY2024 revenue fell by 13.2% y-o-y to $3.22 billion.
Revenue from the infrastructure segment fell by 10% y-o-y to $2.29 billion due to lower revenue from the integrated power business arising from lower aggregate consumption by consumers. Asset management fee revenue rose y-o-y due to higher management fees from a better performance by Keppel Infrastructure Trust A7RU (KIT) in relation to KIT’s acquisitions in Germany and Australia.
Revenue from the real estate segment fell by 44% y-o-y to $298 million largely due to lower revenue from property trading projects in China as a result of fewer units completed and handed over during the period. The segment’s revenue also fell due to lower revenue from property trading projects in Singapore and India. Asset management fee revenue remained stable y-o-y.
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Revenue from the connectivity segment inched up by 1% y-o-y to $653 million with higher divestment and acquisition fees from asset management and higher project management revenues from data centres offset by lower revenue from M1.
Profit from continuing operations excluding its legacy O&M assets rose by 7% y-o-y to $513 million with the infrastructure and connectivity segment registering y-o-y growths, offset by lower net profit from the real estate segment. The group's legacy O&M assets saw a higher net loss in the 1HFY2024 of $209 million from fair value losses on the remaining Seatrium shares in our segregated account as compared to gains in 1HFY2023. The higher net loss was also attributable to a higher share of loss from an associate.
Operating profit fell by 11.6% y-o-y to $505.5 million.
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Profit before tax fell by 28% y-o-y to $433.6 million.
An interim dividend of 15 cents per share was declared for the period, unchanged from last year’s interim dividend.
As at end-June 2024, Keppel’s funds under management (FUM) stood at $85 billion, 55% higher h-o-h. The higher FUM was due to stronger performances by Keppel’s private funds and listed entities as well as the inclusion of leading European real estate manager, Aermont Capital.
Asset management fees, which includes 100% from the group’s subsidiary managers, joint ventures and associated entities, as well as the share of fees based on Keppel’s stakes in its associates, surged by 75% to $203 million on the same basis, representing a fee-to-FUM ratio of 55 basis points (bps).
With a combined dry powder of about $25 billion, Keppel and Aermont are in position to seize opportunities to acquire attractive assets that may become available when markets go through dislocations, says Keppel in its Aug 1 statement. Keppel and Aermont are concurrently pursuing an extended deal flow pipeline of $27 billion.
“We are making steady progress in our transformation to be a global asset manager and operator. Bolstered by both organic growth and the successful acquisition of 50% of Aermont Capital, our asset management profit more than doubled year on year to $75 million, while FUM grew 55% to $85 billion in the first six months of 2024,” says Loh Chin Hua, CEO of Keppel.
“Our asset-light strategy is also bearing fruit. Since end-2021, we have reduced the total assets on our balance sheet by over 14% to $27.7 billion at the end of 1HFY2024, while our FUM had more than doubled during this period. Today, we are doing more with less — pursuing growth, driving recurring income and improving returns to our shareholders,” he adds.
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As at end-June, cash and cash equivalents stood at $1.44 billion.
Unitholders will receive their dividends on Aug 23.
Shares in Keppel closed 11 cents higher or 1.69% up at $6.64 on July 31.
