Keppel Corp interim dividend up 4 times as group returns to profitability

MAINBOARD-LISTED conglomerate Keppel Corp is back in the black for the first half-year, with positive contributions from most units, its results indicated on Thursday.

Keppel posted net profit of S$299.8 million for the six months to June 30, reversing the loss of S$537.1 million in the year-ago period from offshore and marine impairments. Operating profit was S$188.0 million, against a loss of S$149.4 million before.

Revenue rose by 15.5 per cent year on year to S$3.68 billion, lifted by the sale of property. Keppel attributed the turnover growth to "higher contributions from the urban development, asset management and energy and environment segments".

Still, Keppel's energy and environment segment recorded a net loss of S$179 million - but narrowed from S$958 million previously - as the Keppel O&M unit returned to profitability with an order book of S$5.7 billion as at end-June. The segment's red ink was attributed mainly to exposure to oil exploration firm KrisEnergy, which in June submitted a wind-up petition and said it could not pay its debts.

Meanwhile, the net profit of Keppel's asset-management business fell to S$117 million, from S$258 million the year prior, in the absence of one-off gains. Still, Keppel noted that trust contributions were stable year on year when those gains were excluded.

Keppel Capital also reported both stronger operating results and mark-to-market gains from investments, and the private funds made gains from disposal of investments.

However, urban development saw net profit of S$279 million, up from S$215 million before, with a boost from Keppel Land's contributions from China and Vietnam.

The connectivity segment posted a net profit of S$27 million, against nil in the year-ago period, as shrinking contributions from pandemic-hit telco unit M1 were offset by a return to profit at Keppel Logistics and narrowing losses at Keppel Data Centres.

Earnings per share was 16.5 Singapore cents, against a loss per share of 29.5 cents before, while net asset value increased to S$6.12 a share, from S$5.90 as at the end of 2020.

Keppel said in a statement that the half-year earnings were better than the pre-pandemic levels, excluding revaluations, impairments and divestments, and Covid-19 grants.

Group chief executive Loh Chin Hua noted that Keppel has "made good progress" in its Vision 2030 strategic transformation, and expects to unlock S$3 billion in asset monetisation "well ahead of our three-year schedule". The group is now shooting for the higher end of its S$3-billion-to-S$5-billion target range by the end of 2023.

"Beyond organic growth, we are actively exploring M&A opportunities in our focus areas, to grow the group's business and improve the quality of our earnings more quickly," said Mr Loh.

"As we execute Vision 2030, we believe that Keppel will emerge stronger, more relevant, and on a faster growth path post-pandemic."

The board declared an interim dividend of S$0.12 cents a share - four times the dividend in the year-ago period. The books will close on Aug 10, with payouts going out on Aug 19.

Its shares closed on Thursday at S$5.39, up by S$0.11 or 2.08 per cent, before the news. READ MORE:

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