SGX-listed Keppel Ltd. (SG:BN4) posted a robust FY23 profit of S$4.07 billion, thanks to a one-time gain from the sale of its offshore and marine (O&M) unit. The O&M sale contributed S$3.3 billion, while profit from continuing operations grew 19% to S$996 million in Fiscal 2023. Furthermore, Keppel’s revenue from continuing operations rose 5% to S$6.97 billion in FY23.
Keppel is a Singaporean conglomerate involved in multiple industries such as marine, infrastructure, energy, asset management, and urban development.
Keppel’s Strong Financial Performance
Keppel reported strong financials in the second half ending December 31, 2023, thanks to robust performance in all three sectors – Infrastructure, Real Estate, and Connectivity. Net profits from continuing operations in H2 FY23 grew 36% year-over-year.
Backed by solid results, Keppel proposed a final cash dividend of S$0.19 per share, bringing the total 2023 dividend to S$0.34 per share. Including the special dividend, distributed by way of “in-specie” Keppel REIT (KREIT) units, shareholders will receive total dividends of S$2.70 per share for Fiscal 2023.
Keppel is trying to transform into an asset management-focused company from its current diverse structure. It aims to generate a higher proportion of recurring income. Interestingly, recurring income increased 54% to S$773 million in FY23 and accounted for 88% of the full-year net profit from continuing operations.
Further, Keppel is transitioning toward high-demand areas like clean energy, decarbonization, environmental solutions, and digital connectivity. Working in this direction, Keppel announced the acquisition of a 50% stake in Aermont Capital, a Europe-based asset manager, for up to S$1.35 billion. Keppel also intends to acquire the remaining stake in Aermont in 2028.
Notably, Infrastructure was the biggest contributor toward net income in Fiscal 2023, with a 135% year-over-year growth to S$699 million. The real estate segment contributed S$426 million. Also, funds under management at year-end grew 10% to S$55 billion in FY23, driving a 6% increase in asset management fees.
Is Keppel Corp a Good Buy Now?
With two Buy ratings received in the past three months, BN4 stock has a Moderate Buy consensus rating on TipRanks. The Keppel Corp share price target of S$8.49 implies 18.6% upside potential from current levels. Please note that these ratings were given before the results were announced and could change depending on analysts’ reviews.
