The past two years have been an exciting journey for investors in Singapore's Keppel Ltd.。The asset manager has undergone a significant transformation from a large enterprise to a light-asset institution。The transformation began with the sale of its marine and marine (O & M) division at the end of 2022, followed by a major restructuring in May last year.。Last week, Keppel unveiled its 2023 results, with the group reporting a record net profit of S $4.1 billion.。Here are five highlights of Keppel's latest earnings。

Performance Outbreak

Keppel's Revenue Grows 5 YoY in 2023.2% to S $6.9 billion, with two of the three business segments achieving year-over-year revenue growth。

Group's operating profit surged 90% YoY.4% to S $1.1 billion。Net profit increased fourfold year-on-year to S $4.1 billion, with the sale of the marine and marine division generating a net profit of S $3.2 billion.。Excluding this unusual item, profit from continuing operations increased 6% year-on-year to 8.8.5 billion Singapore dollars。This net profit also includes the distribution loss of Keppel Real Estate Investment Trust (Keppel REIT) units.。Excluding this, core net profit in 2023 increased 19% year-over-year to 9.9.6 billion Singapore dollars。

The group also produced 86.S $2.7 billion in free cash outflows, almost 43 in 2022.6.6 billion Singapore dollars double the negative free cash flow。In addition, Keppel also declared its final cash dividend per share of 0.19 Singapore dollars, bringing the total dividend to 0 in 2023.34 Singapore dollars, up slightly from 0 in 2022.33 Singapore dollars。

From a total shareholder return perspective, Keppel has performed well over the past two years。Last year, the asset manager achieved 61.1% total shareholder return (TSR), compared to the group's total shareholder return of 49 in 2022.3%。These returns far exceed the 2022 Singapore Straits Times Index (SGX: ^ STI) 8.3% return and 4% in 2023..7% return。

All three sectors are profitable

Keppel's three business segments are profitable, with improved performance in infrastructure and connectivity。

The infrastructure sector was the best performing sector, with net profit doubling year-on-year to 6.9.9 billion Singapore dollars。This strong performance was attributed to higher net generation and profits from the integrated power business.。The segment also benefited from fair value gains and no capital recovery losses in 2022.。

REAL ESTATE SECTOR REPORTS NET PROFIT OF 4.2.6 billion Singapore dollars, down 8% year-on-year after excluding one-time losses。The segment was impacted by higher general expenses and lower fair value gains of investment properties。

Strong performance in the Connectivity segment, with net profit up 30% YoY to 1.2.7 billion Singapore dollars。

Expanded the continuing income base

In 2023, Keppel's ongoing revenue base grew significantly, growing 54% year-over-year to 7.7.3 billion Singapore dollars。Of these, the vast majority of sustained revenue comes from the infrastructure sector and the rest from the connectivity sector.。In addition, 80 per cent of net profit from continuing operations in 2023 was sustainable, compared with 60 per cent in 2022.。

Expand infrastructure platform to add FUM

Size under management (FUM) is another growth area for Keppel。In 2023, FUM grew 58% year-over-year to S $79 billion, with Gippo acquiring Aermont Capital at the end of last year and achieving organic FUM growth.。

Infrastructure is one of the fastest growing asset classes in the world, with Keppel's core infrastructure fund closing for the first time at 5.$7.5 billion。The group's fund management platform also launched a China-focused sustainable urban renewal project, raising 300 million Singapore dollars.。

Management noted that more than S $14 billion in assets and M & A deals are currently underway to help further grow FUM.。As FUM increases, asset management expenses will increase accordingly。In 2023, asset management expenses increased by 6% year-over-year to 2.8.3 billion Singapore dollars。Keppel aims to grow FUM to 200 billion Singapore dollars by 2030, a target it unveiled on last year's Investor Day.。

Asset realization exceeds expectations

In terms of asset realization, Keppel has also achieved exceptional results。Since October 2020, a total of S $5.4 billion in assets has been realized, exceeding the target of S $3 billion to S $5 billion in assets over three years.。Through this action, about S $4.1 billion in cash was released to drive Keppel's asset-light strategy.。

Promotion of ROE

This series of activities has improved Keppel's return on equity (ROE).。Excluding special gains and rights issue losses, ROE was 7 in 2022..3%, while rising to 9 in 2023.3%。With this blue-chip group's asset-light strategy and focus on a growing FUM, investors can see this ROE steadily improve over the next few years。