
Keppel core earnings to see 8% CAGR in next two years: DBS
This is due to expanding funds under management.
DBS Group Research said that Keppel Ltd. is projected to see a compound annual growth rate (CAGR) of 8% for core earnings, excluding legacy O&M and discontinued operations, over the next two years.
This would be largely driven by expanding funds under management (FUM) in asset management.
FUM, at $88b as of the end-2024, is set to reach the $100b target ahead of the 2026 timeline, whilst Keppel aims to further grow this to $200b by 2030.
Keppel’s FY 2024 net profit, excluding legacy O&M and discontinued operations, grew by 5% year-on-year (YoY) to $1.06b, 4% ahead of DBS’s estimate.
This was partly aided by higher revaluation gains, which offset the weaker real estate development business.
The infrastructure segment remains the biggest earnings contributor, with $673m in net profit, accounting for 63% of group profits.
The real estate segment was weaker than expected, with net profit decreasing by 3% YoY to $306m, dragged by the development business.
DBS also stated that it is worth noting that asset management fees grew 54% YoY to $436m, driven by an approximate 60% increase in FUM to $88b, following the Aermont acquisition.
Moreover, the infrastructure segment is expected to continue delivering steady earnings, with approximately 70% of its total generation capacity contracted for at least three years.