Decent earnings growth but still a miss - Keppel reported 1H25 net profit of S$431m (+25% y-o-y). Infrastructure remained the key earnings pillar, contributing S$346m, followed by real estate at S$98m. Excluding contribution from its non-core portfolio for divestment, reported net profit was S$431m (+25% y-o-y) and slightly below our expectations due to the infrastructure segment.
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Asset monetisation efforts on track.
Keppel’s capital recycling efforts in 1H25 saw a total of S$915m in proceeds which we view as positive. Since the start of its programme to divest non-core assets in Oct 20, total proceeds have reached S$7.8b.
Management expects to finalise a further S$500m in additional transactions in 2H25 and highlighted a remaining S$14.4b of assets in carrying value.
Shareholder returns remain in focus.
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In addition, Keppel has announced a S$500m share buybacks programme. Shares repurchased will be held as treasury stock, with management highlighting their intended use for employee share plans and potential M&As. Management noted that it prefers acquiring shares now rather than issuing new shares later to avoid dilution.
Clarity on asset-light strategy and global positioning.
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
