Keppel has reported revenue for continuing operations of $1.5 billion in the 1QFY2024 ended March 31, 6.25% lower than $1.6 billion in the corresponding quarter the year before. The revenue saw higher contributions from its infrastructure and connectivity segments which offset the lower revenue from its real estate segment.
While no numbers were revealed, the group said that net profit for the quarter fell y-o-y including the effects of its legacy offshore and marine (O&M) assets and mitigated by stronger performances from its infrastructure and connectivity segments. Excluding its O&M assets, net profit improved y-o-y.
The group also reported a 51% y-o-y growth in recurring income for the quarter driven by stronger contributions from asset management and operating income.
During the quarter, asset management fees grew by 52% y-o-y to $88 million with improvements across infrastructure, real estate and connectivity and including higher performance fees from Keppel Infrastructure Trust A7RU (KIT).
Year-to-date (ytd), the group has raised $436 million in equity and conducted some $1.1 billion in acquisitions and divestments.
Over $14 billion in assets and mergers and acquisition (M&A) deals are being pursued within the same period.
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Ytd, Keppel reported the monetisation of about $170 million in assets including the proposed divestment of a residential project in Wuxi, China. The move brings Keppel’s cumulative asset monetisation to over $5.5 billion since October 2020. The group is focused on achieving $10 billion to $12 billion in asset monetisation by the end of 2026. Keppel also received a cash payment of $71.3 million from Asset Co.
As at March 31, Keppel’s net gearing stood at 0.9 times, unchanged from Dec 31, 2023. About 64% of Keppel’s borrowings were on fixed rates with an average cost of funds of 3.81% and a weighted tenor of about three years.
“We started 2024 on a good footing, riding on the momentum of Keppel’s transformation into a global asset manager and operator. Our recurring income surged 51% y-o-y, propelled by strong improvements in asset management and operating income in 1QFY2024. We are also progressively de-risking our investments, with the receipt of $71.3 million in cash from Asset Co, as well as the proposed divestment of one of our landbanks in Wuxi, China for a consideration of $161.6 million,” says Keppel CEO Loh Chin Hua.
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“Amidst the volatile environment, we see exciting opportunities as investors’ growing preference for defensive, cashflow generative assets is driving demand for alternative real assets in infrastructure and private credit, where Keppel has strong expertise. With the DNA of an asset manager as well as deep operating capabilities, we can create alphas for the funds that we manage, and reinforce Keppel’s unique value proposition to our global limited partners,” he adds.
Shares in Keppel closed 8 cents higher or 1.14% up at $7.11 on April 24.
