Keppel - UOB Kay Hian 2024-08-02: Strong 1H24 Operating Results But Legacy Assets Are A Drag

• Keppel reported a 7% y-o-y increase in 1H24 net profit (excluding legacy assets) of S$513m with its infrastructure and connectivity segments performing strongly. However, a net loss of S$209m from legacy O&M assets, some of which is non-cash in nature, took the gloss off the result.
• - Read this at SGinvestors.io -

Profit growth from infrastructre & connectivity segments in 1H24

• Keppel (SGX:BN4) reported a solid set of results for 1H24 with stronger-than-expected net profit excluding legacy assets of S$513m (+7% y-o-y). Importantly, its recurring income grew 14% y-o-y to S$388m.
• Keppel declared a S$0.15/share dividend for 1H24 which was unchanged vs 1H23. See Keppel's dividend dates.
• - Read this at SGinvestors.io -

A messy set of numbers due to 2023 divestment of KOM and presence of legacy O&M assets.

• The market is likely to focus on Keppel’s net profit from continuing operations of S$304m which includes the effects of legacy offshore & marine (O&M) assets. These effects total a net loss of S$209m (1H23: S$36m) due to the profit and loss effects from:
  1. holding Seatrium (SGX:5E2) shares,
  2. holding the Asset Co vendor notes, and
  3. contributions from stakes in Floatel and Dyna-Mac (SGX:NO4).
• We believe that these overshadow two key positives in KEP’s results:
  1. the infrastructure segment which saw a 25% y-o-y increase in net profit to S$363m, and
  2. net profit for the connectivity segment more than doubled y-o-y to S$76m.

Infrastructure reported a strong performance

• Read more at SGinvestors.io.

Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-08-02

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