Keppel (KPELY) Q2 2026 Earnings Report

The call presents a constructive transformation narrative: core (new Keppel) businesses are delivering stronger recurring income, significant FUM growth, substantial SSCI contributions and improved cash generation, while clear monetization plans and operational milestones (Sakra Cogen, Bifrost) support future earnings. These positives are partially offset by sizeable legacy noncore losses, rig impairments and higher consolidated leverage which depress headline profits and ROE. Management has a defined pathway to monetize noncore assets and is deploying scale in asset management, suggesting the near‑term negatives are largely legacy‑related and being actively managed.

Management guided that the “new Keppel” is tracking well: H1 2026 new‑Keppel net profit was SGD 530m (up 25% YoY) versus group net profit of SGD 155m after a SGD 375m non‑core loss; recurring income rose 13% YoY to SGD 467m and SSCI profits jumped to ~SGD 175m (from SGD 18m). Cash metrics improved—group free cash flow swung to a SGD 570m inflow (new Keppel FCF +SGD 244m)—and balance‑sheet ratios showed group net debt/EBITDA of 6.7x while new Keppel’s was ~1.4–1.5x; annualised ROE for new Keppel ~15% (group ROE 3.6%). Asset‑management scale hit SGD 106bn FUM (surpassing the SGD 100bn 2026 target), YTD asset monetizations announced ~SGD 1.7bn (on track to SGD 2–3bn FY), realized non‑core monetizations ~SGD 560m at end‑June, expected cash from first six rig divestments ~SGD 611m (additional ~SGD 1.3bn from remaining four rigs in 2027–28), and gross non‑core asset value ~SGD 13.7bn. Other notable metrics: interim dividend SGD 0.15/share; Sakra Cogen 600MW (+45% capacity) contributed to Power EBITDA growth of 9% YoY; group cost savings >SGD 100m annual run‑rate and M1 cost‑save target SGD 70m run‑rate by 2028 (SGD 4m YTD, SGD 10m target by end‑2026).