Keppel Profit Soars on One-off Gain from O&M Unit Sale

Singapore's Keppel Corp KPLM.SI on Thursday reported a more than seven-fold jump in its first-half profit boosted by a one-off gain from the sale of its offshore and marine (O&M) unit and strong performance from the infrastructure business.

Keppel sold its offshore and marine business in February for S$4.50 billion ($3.40 billion) to Sembcorp Marine, recognising a gain of S$3.3 billion, as it aims to transform into an asset manager overseeing $150 billion by 2030 and focus on green energy.

It managed S$53.2 billion in funds as of June 30.

In May, Keppel announced a restructuring plan which would quadruple its managed assets and see it operate more like Canada's Brookfield Asset Management and Australia's Macquarie Group Ltd.

The company has so far achieved S$4.8 billion in cumulative asset monetization since it began the program in October 2020. It has a target of up to S$12 billion in cumulative asset monetization by 2026-end.

"We believe that 2H23 will present more interesting investment opportunities as the market adjusts to the new pricing paradigm, which better reflects the tighter credit markets, higher interest rates and more subdued economic growth outlook," Chief Executive Loh Chin Hua said in a statement.

Keppel's infrastructure business reported a net profit of S$291 million in the first half, more than double from last year's S$139 million on stronger contributions from the integrated power business.

Helped by the one-off gain, the group's net profit for the six months ending June 30 jumped to S$3.63 billion ($2.75 billion) from last year's S$498 million. On continuing operations basis, net profit rose 3% to S$445 million.

Keppel, which traces its roots to a small ship repair yard corporatized in 1968, proposed an interim dividend of 15.0 Singapore cents per share, the same as last year.

($1 = 1.3231 Singapore dollars)

(Reuters - Reporting by Sameer Manekar; editing by Eileen Soreng)