Core Insights - Keppel Corporation has transformed from a diversified industrial group into a global asset management company under the leadership of CEO Loh Chin Hua, focusing on sustainable urbanization and digitalization [1][2][4] Group Restructuring - The company faced pressure from market expectations for higher returns and stable recurring income, leading to a strategic review that resulted in the decision to pivot towards asset management [2][4] - The divestment of its core offshore and marine (O&M) business was a critical turning point, allowing Keppel to focus on more profitable areas [4][5] Asset Monetization - Keppel identified S$17.5 billion (approximately US$13.3 billion) in underutilized assets for monetization, allowing the company to maintain operational roles while transferring ownership to third parties [5] - The company has already monetized over S$7 billion (approximately US$5.3 billion) in assets and aims to achieve S$10-12 billion (approximately US$7.6-9.1 billion) by 2026 [5] Organizational Transformation - Keppel restructured its operations under the "Vision 2030" framework, transitioning from vertical business units to three horizontal platforms focused on real estate, infrastructure, and connectivity [6] - The integration process was smooth, with leadership roles assigned to capable individuals, enhancing strategic capital allocation and talent management [6] Sustainable Development - The company views sustainability as a business opportunity rather than merely a risk mitigation strategy, exemplified by the transformation of its headquarters into a net-zero energy building [8] - This shift has led to a new business line focused on helping clients adapt their real estate to a low-carbon future, demonstrating that sustainable practices can coexist with profitability [8] Leadership and Future Outlook - Loh Chin Hua emphasizes the importance of maintaining focus and resilience during crises, which has been crucial for the company's recovery and transformation [9] - Keppel's ongoing transformation is supported by a clear direction and solid foundation, positioning the company for future growth [9]

Financial Data and Key Metrics Changes - Keppel's earnings from the asset management business more than doubled year-on-year to $75 million in the first half of 2024, with funds under management rising 55% to $85 billion since December 2023 [3][10] - Net profit from continuing operations was $513 million in the first half of 2024, a 7% increase from $481 million in the same period of 2023 [5][20] - The annualized return on equity improved to 9.8% in the first half of 2024 from 8.7% in the first half of 2023 [6][20] - Total assets decreased to $27.7 billion as of June 2024 from $32.3 billion at the end of 2021 [7] - Recurring income rose 14% year-on-year to $388 million, making up about 76% of net profit compared to 71% in the first half of the previous year [8] Business Line Data and Key Metrics Changes - The infrastructure segment achieved a net profit of $363 million in the first half of 2024, a 25% increase from $291 million in the first half of 2023 [22] - The real estate segment recorded a net profit of $129 million, down 31% from $186 million in the first half of 2023 [23] - The connectivity segment's net profit more than doubled to $76 million from $37 million in the first half of 2023 [24] Market Data and Key Metrics Changes - The infrastructure division expanded its long-term technology solutions and energy services contracts, which grew over 20% to $5.2 billion by the end of June 2024 [9] - The asset management fees grew to $203 million, up by about 75% year-on-year, mainly due to improved performance of private funds and listed vehicles [10] Company Strategy and Development Direction - Keppel aims for an interim monetization target of $10 billion to $12 billion by the end of 2026, focusing on asset monetization as a key pillar of its Vision 2030 goals [4] - The company is pursuing growth initiatives in alternative real assets, particularly in infrastructure, connectivity, and private credit, which are expected to drive demand [18] - Keppel is enhancing its operating capabilities in data centers and is exploring new sectors such as education and living sectors for future growth [46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment but expressed confidence in the company's growth trajectory and ability to capitalize on opportunities in alternative real assets [18][60] - The company is focused on improving operational efficiency and reliability in its integrated power business to navigate market volatility [31] Other Important Information - The Board of Directors approved an interim cash dividend of $0.15 per share for the first half of 2024, reflecting confidence in Keppel's growth trajectory [8] - The company has a combined dry powder of about $25 billion, positioning it well to seize attractive asset acquisition opportunities [10] Q&A Session Summary Question: Breakdown of losses from legacy O&M contracts - CFO provided a breakdown of the $209 million loss, with approximately $67 million from Seatrium shares, $34 million from Floatel and Dyna-Mac, and $108 million from vendor notes [27][28] Question: Future dynamics of the integrated power business - Management highlighted that 60% of contracted capacity is secured for over three years, providing predictability in cash flow [30] Question: Profitability of asset management revenue - Management noted that Aermont contributed about $30 million in revenue for three months, with profitability affected by amortization [33] Question: Size and growth ambitions for data centers - The company aims to raise a third fund with a target size of $2 billion, with existing funds having an AUM of about $5 billion [34] Question: Strategy in China - Management acknowledged challenges in China but emphasized a revised playbook focusing on energy transition and data centers [43][44] Question: EBITDA growth target for decarbonization solutions - Management indicated that secured contracts for decarbonization solutions have grown to $5.3 billion, targeting over $100 million in EBITDA by 2027 [55] Question: Sustainability of dividends - Management expressed confidence in maintaining the interim dividend, supported by increasing recurring income [58][60]

Financial Data and Key Metrics Changes - For the full year 2023, Keppel achieved a record net profit of approximately S$4.1 billion, more than quadrupling the profit from financial year 2022, which was attributed to gains from the divestment of the offshore and marine business [7][34] - Return on equity (ROE) for financial year 2023 was 37.9%, significantly higher than 8.1% in the previous year [7][35] - Net profit from continuing operations was S$996 million, a 19% increase from S$839 million in financial year 2022 [7][35] - Free cash outflow was S$384 million, slightly improved from S$408 million in the previous year [39] Business Segment Data and Key Metrics Changes - The Infrastructure segment reported a net profit of S$699 million for financial year 2023, a 135% increase from S$297 million in 2022, driven by strong operating income growth [36][43] - The Real Estate segment contributed S$426 million in net earnings, despite challenging market conditions in China, representing a decline compared to the previous year [37][46] - The Connectivity segment's net profit increased by 30% year-on-year to S$127 million, supported by higher recurring income and gains from capital recycling [50] Market Data and Key Metrics Changes - The company has monetized over S$3 billion of assets in China since 2017, with total profits exceeding S$1 billion [16] - As of the end of 2023, the adjusted net debt to EBITDA ratio was 4.6 times, indicating improved financial health [13][38] - The company raised S$2.3 billion in equity and completed S$2.5 billion worth of acquisitions during the year [20][22] Company Strategy and Development Direction - Keppel is transitioning from a conglomerate structure to a global asset manager and operator, with a focus on recurring income and asset-light operations [3][4] - The proposed acquisition of Aermont Capital is expected to enhance Keppel's growth as a global asset manager [4][27] - The company aims to achieve a funds under management (FUM) target of S$200 billion by 2030, with a current FUM of S$55 billion [22][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, despite external challenges, and emphasized the importance of focusing on recurring income [6][25] - The company anticipates increased fundraising and deal-making activities as inflation eases and interest rates stabilize [25] - Management highlighted the importance of sustainability and digitalization trends in driving demand for Keppel's solutions [25][26] Other Important Information - The board proposed a final cash dividend of S$0.19 per share for financial year 2023, higher than the previous year's final dividend [11] - The company has secured S$1 billion in sustainability-linked revolving credit facilities for general corporate purposes and business opportunities in sustainability [14] Q&A Session Summary Question: Growth expectations and divestment targets for 2024 - Management noted that while 2023 set a high benchmark, they expect to continue improving and are focused on recurring income and asset-light operations [55][57] Question: Details on dry powder for funds and asset classes - Management indicated that they are actively pursuing opportunities in the market and expect to see a faster pace of investments in 2024 [64][66] Question: Sustainability of infrastructure operating earnings - Management expressed confidence in the sustainability of infrastructure earnings due to long-term contracts and strategic partnerships [60][70] Question: Power purchase agreements and profitability - Management highlighted that their contracts are fully hedged or indexed pass-through, reducing fuel volatility risk [78] Question: Plans for platform deals and focus on Aermont acquisition - Management confirmed they are open to other platform deals but emphasized the rarity of finding the right fit [82] Question: Risks of impairments in China assets - Management acknowledged the challenging market in China but expressed confidence in their unique capabilities to improve asset values [86][87]

| --- | --- | --- | --- | --- | |-----------------|-------------------|-------|-------|-------| | | | | | | | | | | | | | 2H23 & FY23 | Financial Results | | | | | 1 February 2024 | | | | | | | | | | | CONTENTS 01 Address by CEO 02 Financial highlights 03 Appendices 2 Keppel Address by CEO 3 Transformed for growth Delivered on strategy with strong shareholder returns. | --- | --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------|----------------------|------------- ...

Financial Data and Key Metrics Changes - Keppel Corporation reported a net profit of S$927 million for FY 2022, a decrease of 9% from S$1.02 billion in FY 2021, primarily due to lower earnings in Urban Development and provisions for specific projects at Keppel O&M's yard in the US [16][17][41] - Return on Equity (ROE) was 8.1% for FY 2022, down from 9.1% in FY 2021 [18][41] - Free cash outflow was S$408 million in FY 2022, compared to an inflow of S$1.76 billion in FY 2021, mainly due to lower divestment proceeds [18][45] - Net gearing remained stable at 0.78x as of December 2022, compared to 0.79x in September 2022 [18][19] Business Line Data and Key Metrics Changes - The Asset Management segment delivered improved earnings of S$311 million in FY 2022, compared to S$301 million in FY 2021, making it the largest contributor to the Group's net profit [26][41] - Energy & Environment's net profit was S$241 million, more than doubling year-on-year, driven by higher contributions from electricity and gas sales [29][41] - Connectivity segment, led by M1, saw earnings grow 32% year-on-year to S$75 million, supported by its transformation into a cloud-native connectivity platform [34][41] - Urban Development's net profit declined to S$282 million, mainly due to reduced contributions from China property trading projects [58][41] Market Data and Key Metrics Changes - Keppel O&M achieved annual revenue of S$2.8 billion, its highest in six years, with a net order book of S$11.0 billion at the end of 2022, the highest level since 2007 [7][54] - The announced portfolio of renewable energy assets more than doubled to 2.6 GW, on track towards a target of 7.0 GW by 2030 [31][41] - M1's enterprise business grew steadily, making up about 33% of its revenue in 2022, up from 20% in 2020 [34][41] Company Strategy and Development Direction - Keppel Corporation is focusing on its Vision 2030 transformation, moving towards an asset-light model and growing recurring income [5][15] - The company plans to continue its asset monetization program, aiming to exceed S$5 billion by the end of 2023 [24][41] - The proposed combination of Keppel Offshore & Marine with Sembcorp Marine is expected to create a stronger global player in the energy transition [6][102] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging global economic environment in 2022, marked by geopolitical tensions and inflation [4][39] - The company remains optimistic about the recovery of the Chinese economy post-zero COVID policy, which is expected to boost domestic demand [33][49] - Management expressed confidence in achieving a targeted ROE of 15% by Vision 2030 through improved quality and absolute earnings [72][76] Other Important Information - The Board of Directors proposed a final cash dividend of 18.0 cents per share for FY 2022, maintaining a total cash dividend of S$0.33 per share, the same as in 2021 [20][41] - The company has made significant investments in energy and environment projects, including renewable energy and sustainable urban renewal-related investments [25][46] Q&A Session Summary Question: Can you elaborate on Keppel's NTA rising and falling after the Sembcorp Marine transaction? - Management clarified that upon completion of the transaction, NTA would initially rise due to significant gains, followed by a decrease after the distribution of shares to shareholders [67][70] Question: Why is the final dividend lower despite increased recurring income? - Management explained that the final dividend reflects a payout of 50% to 60% of earnings, and while recurring income has increased, net profit was lower than the previous year [72][74] Question: What was the impact of the fine on dividend distribution? - Management stated that the fines had no material impact on earnings or the decision regarding dividend distribution [78][79] Question: What are the earnings contributions from new energy and environment investments? - Management indicated that while investments were made, material returns are not expected in the short term, but they will contribute to recurring income over time [80][82] Question: What are the key drivers for electricity spreads in Singapore for 2023? - Management noted that electricity spreads were influenced by global energy prices and local maintenance activities, with a cautious outlook for 2023 [97][99] Question: What is the outlook for residential launches in China? - Management expressed optimism about the recovery in the Chinese property market and plans to launch projects based on market conditions [100][101]

Financial Data and Key Metrics Changes - Keppel Corporation achieved a net profit of SGD 498 million in the first half of 2022, a 66% increase from SGD 300 million in the same period of 2021 [7] - Annualized return on equity improved to 8.4% for the first half of 2022, compared to 5.5% for the first half of 2021 [32] - Free cash outflow was SGD 127 million in the first half of 2022, compared to an inflow of SGD 499 million in the first half of 2021 [8] - Net gearing remained stable at 0.68x as of end-June 2022, unchanged from end-December 2021 [8] Business Line Data and Key Metrics Changes - Urban Development and Asset Management contributed 65% of the Group's profits, while Energy & Environment contributed SGD 45 million, reversing a net loss from the prior year [34] - Asset Management's net profit increased by 32% to SGD 155 million, driven by higher fee income and fair value gains [47] - M1's net profit grew 62% to SGD 34 million, supported by strong enterprise business growth and increased roaming revenues [23] - Keppel Infrastructure's earnings rose 77% year-on-year to SGD 106 million, reflecting strong execution of ongoing projects [40] Market Data and Key Metrics Changes - The property market in China faced significant challenges, with Keppel Land experiencing a 50% drop in units sold, from 1,550 units in the first half of 2021 to 480 units in the first half of 2022 [54] - Despite short-term challenges, management remains optimistic about the long-term potential in key Tier 1 and 2 cities in China [19] Company Strategy and Development Direction - Keppel is focusing on sustainable urbanization solutions as part of its Vision 2030 strategy, emphasizing asset management and engineering capabilities in Energy & Environment, Urban Development, and Connectivity [6] - The company is actively monetizing its assets, with a target of exceeding SGD 5 billion by the end of 2023 [12] - Keppel is leveraging its asset-light model to invest in renewables and decarbonization solutions, with a recent investment of SGD 234 million in onshore wind assets [15] Management Comments on Operating Environment and Future Outlook - The global economic outlook has weakened due to geopolitical tensions, inflation, and supply chain disruptions, impacting growth prospects [3] - Management expressed confidence in the Group's ability to navigate challenges and enhance earnings through strategic execution [6] - The energy transition and climate action are expected to drive demand for sustainable energy infrastructure, positioning Keppel favorably in the market [29] Other Important Information - The Board approved an interim cash dividend of SGD 15.0 per share for the first half of 2022, higher than last year's interim dividend of SGD 12.0 [9] - Keppel has completed the divestment of Keppel Logistics and is in the process of combining Keppel O&M with Sembcorp Marine [6] Q&A Session Summary Question: Timeline for potential SGD 200 billion AUM - Management indicated no specific timeline but believes it is achievable based on asset-light model and monetization plans [50] Question: Insights into China projects and sales drop - Management reported a 50% drop in units sold in China but noted strong secondary market pricing in key cities [54] Question: Foresee any impairments in 2022? - Management reviewed projects and concluded no need for impairments, citing low risk for the land bank [56][58] Question: Update on data center development plans - Management is exploring innovative solutions for data centers, including a floating data center module [59] Question: Update on proposed O&M transactions - Management reported good progress on antitrust applications and integration planning, expecting completion in Q4 2022 [64] Question: New property project launches expected? - Management confirmed new launches in China and Vietnam, with approvals secured for several projects [74]

Financial Performance - FY21 net profit reached S$1023 million, a sharp reversal from a net loss of S$506 million in FY20[51] - Recurring income grew 33% year-on-year in FY21, reaching S$292 million[15] - Assets Under Management (AUM) grew 14% year-on-year in 2021, reaching S$42 billion[30] - Asset monetisation reached S$29 billion since October 2020, with 407% via Keppel-managed REITs & Trust and 593% via third parties[16] - Proposed final dividend of 210 cents/share, up from 70 cents/share in 2020, equivalent to a total payment of S$600 million for FY21, with a dividend yield of 64% based on the last traded price in 2021[11] Business Segments - Energy & Environment segment's net loss was S$414 million in FY21, compared to a net loss of S$1181 million in FY20[62] - Urban Development segment's net profit grew 74% year-on-year to S$763 million for FY21[65] - Connectivity segment's net profit significantly increased to S$64 million in FY21[70] - Asset Management segment's net profit increased to S$301 million in FY21[75] Strategic Initiatives - Keppel Land completed monetisation of 8 projects in 2021 with total proceeds of ~S$19 billion and net gains of over S$450 million[23] - Keppel O&M secured new orders worth S$35 billion in FY21[18] - M1's postpaid customer base grew 6% year-on-year to over 17 million[128]

Keppel Corporation Limited (OTCPK:KPELF) Q4 2021 Earnings Conference Call January 27, 2022 4:30 AM ET Company Participants Manjot Singh Mann - Chief Executive Officer, M1 Cindy Lim - Chief Executive Officer, Keppel Infrastructure Chris Ong - Chief Executive Officer, Keppel Offshore & Marine Tok Soo Hwa - General Manager, Group Control and Accounts Loh Chin Hua - Chief Executive Officer Christina Tan - Chief Executive Officer, Keppel Capital Louis Lim - Chief Executive Officer, Keppel Land Thomas Pang - Chie ...

Financial Performance and Key Metrics - The company recorded a net loss of S$506 million for Financial Year 2020, compared to a net profit of S$707 million in 2019, primarily due to impairments of S$952 million, mainly in the Offshore & Marine (O&M) business [20][62][81] - Excluding impairments, the net profit for Financial Year 2020 would have been S$446 million, down 46% from S$828 million in 2019 [20][80] - Free cash inflow was S$497 million in 2020, a significant improvement from a free cash outflow of S$653 million in 2019, attributed to lower working capital requirements and higher divestment proceeds [22][63][84] - Net gearing improved slightly to 0.91 at the end of 2020 from 0.96 at the end of September 2020, with a pro forma net gearing of 0.81 if certain asset monetization initiatives had been completed by year-end [23][64] Business Segment Performance - Energy & Environment reported a net loss of S$1.181 billion for Financial Year 2020, primarily due to losses in the O&M business, which had a net loss of S$1.194 billion [26][62] - Urban Development recorded a net profit of S$438 million, a decrease of 10% from S$452 million in 2019, mainly due to lower contributions from Keppel Land [31][62] - Connectivity's net profit fell to S$13 million from S$136 million in 2019, largely due to the absence of fair value gains recognized in 2019 [35][62] - Asset Management's net profit increased by 31% to S$280 million, driven by gains from the reclassification of Keppel Infrastructure Trust and improved performance by Keppel Capital [40][62] Market and Strategic Developments - The company announced its Vision 2030 strategy, focusing on sustainable urbanization and asset-light business models, with plans to monetize S$3 billion to S$5 billion of identified assets over three years [3][4][5] - Keppel O&M is transitioning to focus on renewable energy and cleaner fossil fuels, with new order wins of approximately S$1.0 billion in 2020, 65% of which were in offshore renewables and LNG solutions [27][28] - The logistics business is being divested to sharpen focus, despite benefiting from increased demand due to COVID-19, with potential buyers showing interest [18][19][100] Management Commentary on Future Outlook - Management expressed cautious optimism about the future, acknowledging the ongoing challenges posed by the pandemic but highlighting opportunities arising from accelerated trends in digitalization and energy transition [44][45] - The company is committed to executing its Vision 2030 strategy, which includes a focus on improving the quality of earnings through recurring income and divesting non-core assets [25][45] Other Important Information - The Board proposed a final dividend of S$0.07 per share, bringing the total cash dividend for 2020 to S$0.10 per share [24][81] - The company established a Transformation Office to oversee the execution of Vision 2030 across six workstreams, including growth initiatives and sustainability [6][7] Q&A Session Summary Question: What is the rationale for restructuring the business into Rig Co and Dev Co? - The restructuring aims to clearly identify legacy assets and provide a focused path for their resolution, allowing the operating company to concentrate on transformation efforts [87] Question: What types of projects will Keppel O&M pursue post-restructuring? - Keppel O&M will continue to pursue FPSO and FSRU projects, reinforcing its capabilities as an integrator and project management company [89][91] Question: Is the company actively looking for buyers for KOM? - While exploring inorganic options, the company is focused on executing its organic restructuring plan to enhance competitiveness [93][94] Question: Why is Keppel divesting its logistics business? - The decision to divest is part of a disciplined capital allocation strategy under Vision 2030, with the belief that another player may grow the business faster [100][101] Question: What is the expected impact of the O&M restructuring on costs? - The restructuring is projected to achieve a run rate of S$90 million in overhead cost savings starting January 2021 [110]

2H & FY 2020 Financial Results 28 January 2021 Scope of Briefing • Address by CEO • Group Financial Highlights by CFO 2 Address by CEO Keppel Corporation 3 V Executing Vision 2030 100day plan Achieved good progress on our 100-day plan launched at end-Sep 2020, and will continue to accelerate execution of Vision 2030 to create value. Transformation office • Established to drive the Group's transformation and delivery of Vision 2030 goals, and serve as change catalyst to build greater agility and discipline • ...