Keppel H1 net profit drops 59% to S$155 million on legacy rig impairments, M1 deal fallout
Group revenue rises 24.6% to S$3.8 billion; company points to 25% growth in core “New Keppel” operations
[SINGAPORE] Asset manager Keppel on Thursday (Jul 30) reported a 59 per cent drop in overall net profit to S$155 million for the first half ended Jun 30, down from S$378 million a year earlier.
The sharp bottom-line drop translated to an earnings per ordinary share of S$0.085, down 59.1 per cent from S$0.208 in H1 2025.
The group’s results were dragged down by a S$375 million net loss in its non-core portfolio. This was hit by S$165 million in impairments on legacy rig assets – including recycled foreign currency translation losses – interest costs tied to legacy rigs and depreciation and amortisation adjustments following the termination of M1 Telco’s sale to Simba in May.
Despite the profit drop, group revenue surged 24.6 per cent on the year to S$3.8 billion, lifted by strong top-line expansions in its infrastructure and connectivity arms.
Looking past its non-core drag, Keppel highlighted that its continuing core business – which it labels “New Keppel” – posted a 25 per cent rise in net profit to S$530 million, from S$424 million the previous year.
This performance was lifted by higher contributions from sponsor stakes and co-investments, as well as commercial operations of the Keppel Sakra Cogen Plant.
The real estate segment posted a S$19 million net loss, reversing the year-ago S$98 million net profit. Revenue for the segment was up 2 per cent at S$97 million. The drop in profit was largely attributed to a loss from a dividend in-specie of Keppel Reit units. Excluding this anomaly, the segment would have been profitable at S$32 million.
Revenue rose sharply in the connectivity segment, up 93 per cent at S$682 million. The segment’s net profit increased 54 per cent to S$77 million. This growth was supported by customer commitments secured for the Bifrost Cable System fibre pairs and higher contributions from Keppel DC Reit.
Keppel declared an interim cash dividend of S$0.15 per share for H1 2026, unchanged from the year-ago period. It is also continuing its S$500 million share buyback programme, having repurchased 34.2 million shares for a total of S$356 million since July 2025.
Asset monetisation
As part of its accelerating asset-light strategy, Keppel said it carried out about S$1.7 billion of asset monetisation year to date in 2026, tracking well towards its full-year target of S$2 billion to S$3 billion.
The company’s non-core portfolio currently holds a gross asset value of S$13.7 billion, which it aims to substantially monetise by 2030. This includes establishing a clear pathway to monetise up to 10 legacy offshore rigs for about S$3.7 billion through the newly created Keppel Offshore Fund.
Keppel added that it is focusing on an internal turnaround for M1 while continuing to explore opportunities for broader telco industry consolidation. This comes after the termination of M1’s sale to Simba in May.
“We continue to explore opportunities for consolidation, which we believe is needed for Singapore’s telco sector,” said Keppel. “Based on what we have observed in the region, operators that have undergone consolidation have typically seen a 10 to 15 per cent average revenue per user uplift, leading to more sustainable markets.”
Shares of Keppel rose 2.9 per cent or S$0.34 to close at S$12 on Wednesday.
