Keppel Corporation has reported revenue from continuing operations of $5.27 billion for the 9MFY2023 ended Sept 30, 5% higher y-o-y.
The group says its net profit for the 9MFY2023 also grew “significantly” y-o-y. Excluding discontinued operations, the group’s net profit rose higher on a y-o-y basis with strong performance from its infrastructure and connectivity segments.
Net profit for the 3QFY2023 also stood stronger with all three segments – infrastructure, real estate and connectivity – seeing improvements.
Keppel’s infrastructure division saw strong earnings growth in the 3QFY2023 and 9MFY2023 thanks to its robust integrated power business. As at end-September, all of Keppel’s customers were locked in with fixed or indexed electricity price plans for the next two years.
During the 9MFY2023, the same division clinched over $1.3 billion worth of new Energy-as-a-Service (EaaS) contracts, bringing Keppel’s longterm supply & services contract backlog to $4.1 billion with earnings visibility over 10-15 years.
Over the same period, Keppel generated $178 million in asset management fees. The group’s private funds and listed trusts raised about $1.0 billion in equity in 9MFY2023
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Keppel, during the 9MFY2023, made $1.7 billion worth of acquisitions, of which $600 million were in 3QFY2023 alone. It also completed some $500 million worth of divestments.
In funds, the company reported increased fund activity across its three segments. This includes its new flagship fund Keppel Core Infrastructure Fund achieving its first close of US$575 million ($783 million) while the Keppel Education Asset Fund expanded its footprint into Australia, with the acquisition of two education assets in Sydney for approximately A$198 million ($175 million).
In the connectivity segment, Keppel secured co-investors to acquire a 60% stake in Keppel’s share of the Bifrost Cable System, which is expected to be ready for service in 2024.
M1 also reported higher y-o-y revenue of $908 million in the 9MFY2023 with improved contributions from mobile and enterprise services.
Year-to-date, Keppel announced the monetisation of some $865 million of assets including the $323 million dividend in specie of Keppel REIT units, which was approved by Keppel Corporation BN4 's shareholders on Oct 18.
Since the start of its programme in October 2020, Keppel has announced $5.3 billion in monetisation, outperforming its $3 - $5 billion asset monetisation target ahead of the end-2023 deadline. The company is now working towards its next target of achieving a cumulative $10 billion - $12 billion in asset monetisation by the end of 2026.
In its release, the group says that its total distributions in 2023 are estimated to reach approximately $2.70 per share. The figure includes the dividend in specie of Keppel REIT units worth some 18 cents per share. This is calculated is based on the last traded price of Keppel REIT units which is at 91.5 cents on July 26. The final value of the dividend in-specie will be based on the price of units in Keppel REIT on the completion date on or about Nov 7.
“Keppel has made strong progress executing our transformation plans and continued to deliver superior value to our investors. We have announced about $5.3 billion in asset monetisation to date, exceeding our target of $3 billion - $5 billion ahead of schedule. Even excluding the gains from the divestment of our offshore and marine business, our continuing operations delivered strong performance, which bodes well for Keppel as we press forward with our asset-light strategy to grow recurring income,” says CEO Loh Chin Hua.
“Amidst the volatile environment, we will continue to pursue our growth trajectory as a global asset manager and operator with deep capabilities in infrastructure, real estate and connectivity. Yesterday, our shareholders approved the company’s name change to ‘Keppel Ltd.’, with effect from Jan 1, 2024, reinforcing our efforts to shed Keppel’s conglomerate structure to become one integrated company,” he adds.
As at end-September, Keppel's net gearing stood at 0.89x, up from 0.86x as at end-June, mainly due to the payment of interim dividends. As at end-September 2023, about 61% of Keppel’s borrowings were on fixed rates, with an average interest cost of 3.71% and a weighted tenor of about three years.
Shares in Keppel closed 7 cents lower or 1.11% down at $6.25 on Oct 19.
