Keppel delivers higher shareholder returns in 2023 amid transformation efforts
Uma Devi
CONGLOMERATE Keppel has delivered total shareholder returns of 61.1 per cent for 2023, on the back of the company’s overhaul to be a global asset manager and operator that is more dynamic and asset-light in nature, said chief executive Loh Chin Hua in a New Year message to employees on Monday (Jan 1).
The latest annual returns figure was higher than the company’s full-year returns of 49.3 per cent in 2022.
Loh termed 2023 “one of the most transformational years” in Keppel’s history – a year that began with the divestment of the group’s offshore and marine (O&M) business.
“This was not an easy decision, given that the company had its roots in the O&M sector. But it was a necessary one, to take Keppel on the next phase of our growth trajectory,” he said, adding that the company was able to realise S$9.4 billion in value over time from this divestment.
Last year also marked the 10th year that Loh has been at the helm of Keppel. He said that over the course of 2023, the company made “good progress” in terms of its Vision 2030 roadmap.
Keppel exceeded the upper end of its asset monetisation goal range of S$3 billion to S$5 billion ahead of its end-2023 target. The company also announced a further target of $10 billion to S$12 billion in cumulative asset monetisation by end-2026.
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The group also continued to grow its funds under management, which amounted to over S$53 billion by H1 2023. Loh said Keppel’s latest proposed acquisition of European real estate asset manager Aermont Capital marks a “major leap forward” in the company’s strategy to be a global asset manager.
As Keppel transformed itself, Loh said, the company has also strengthened its focus on sustainability. Some of the company’s efforts include developing Singapore’s first hydrogen-ready power plant, importing renewable energy, and developing green buildings and data centres.
Keppel also achieved closings for new flagship funds focused on investing in highly defensive and essential infrastructure assets, he added.
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Looking ahead, Loh said 2024 is expected to bring with it a challenging global operating environment alongside the likes of conflicts in Ukraine and the Middle East, tensions between the major global powers, slow global growth, prolonged high interest rates and extreme climate events.
“Despite the volatile environment, I am optimistic about the outlook for Keppel,” Loh said.
He noted that many of the macrotrends shaping the global environment – such as climate change, energy transition and increasing digitalisation – are driving demand for the sustainability and digitalisation solutions that Keppel provides.
He also said the recent calls at the latest United Nations Climate Change Conference (COP28) mean that there is likely to be stronger demand for the company’s sustainability solutions.
“Beyond demand from customers, we also see strong interest from investors for the real assets which Keppel can develop and operate, in areas such as clean energy, decarbonisation, environmental solutions, and digital connectivity,” Loh said.
“This strong operating capability, coupled with our track record in asset management, is a key differentiator for Keppel, and what distinguishes us from competitors which may be purely developers and operators, or purely financial investors.”
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