Keppel's pivot to global asset management fuels profit

Keppel Corporation of Singapore posted a sharp rise in first-half underlying profit, driven by the outstanding performance of its infrastructure and connectivity divisions. This growth, therefore, rubs off on the strategic transition of the conglomerate into a global asset manager, signalling great strides toward the long-term goals.

Keppel posted a net profit from continuing operations of S$513 million ($384 million) in the six months ended June 30, up 7 per cent on last year's S$481 million. The strong performance was underpinned by more than 20 per cent expansion in long-term technology solutions and energy services contracts, which surged to S$5.2 billion within the infrastructure division.

The company derives about S$40 million in recurring annual earnings from these contracts and targets to grow this to more than S$100 million every year by FY2027.

All segments were profitable with stronger earnings in the Infrastructure and Connectivity segments more than offsetting a decline in Real Estate contributions,' Keppel said.

Keppel's strategic shift to global asset management paid off, with profit from asset management more than doubling to S$75 million for the half-year.

Keppel also completed its initial buy of 50 per cent of European real estate manager Aermont Capital and said both of them are in a position to seize opportunities to acquire attractive assets that may become available when markets go through dislocations.

With an ambitious target to grow assets under management to $150 billion by 2030, Keppel declared an interim dividend of 15 Singapore cents a share, the same as the previous year's payout.

Including legacy offshore and marine (O&M) assets such as profit and loss effects from Seatrium shares, among others, Keppel's profit for the six months slumped to S$304 million from S$445 million a year ago.

Keppel sold its O&M business last year for $4.5 billion to Seatrium.