Keppel earnings down 59% due to impairments and terminated M1 deal

Non-core portfolio losses deepened to $375m from $46m in the same period a year earlier.

Keppel posted a 59% decline in net profit to $155m in the first half (H1) of the year, dragged down by legacy rig impairments and the termination of the M1 divestment.

The company said in its latest financial report that its H1 non-core portfolio recorded a net loss of $375m from a loss of $46m a year ago.

This was due mainly to impairments for the legacy rig assets, including the recycling of foreign currency translation loss net of write-backs in cost provisions, amounting to $165m, interest costs attributable to the legacy rigs, as well as depreciation and amortisation adjustments with the termination of the M1 divestment.

Excluding the non-core portfolio for divestment, Keppel’s net profit increased 25% to $530m. This was underpinned by significantly higher contributions from SSCI, as well as stronger recurring income contributions from asset management and the operating platform.

SSCI contributed $175m to earnings versus $18m in H1 2025.

At the business segment level, both Infrastructure and Connectivity delivered strong earnings growth in H1, with net profit expanding 55% and 54%, respectively, from a year ago, offsetting weaker results in Real Estate. The Infrastructure Segment remained the largest earnings contributor in the period.

Keppel said its financial position strengthened in H1, supported by cash inflows from both operating and investing activities. Free cash inflow for the period was $570m, reversing an outflow of $48m last year.

"We have strengthened the quality of our earnings, grown our Funds under Management to $106b, delivered landmark assets such as the Sakra Cogen Plant and Bifrost, and announced about $1.7b of asset monetisation this year," said Loh Chin Hua, CEO of Keppel.

"We have also announced a solution for our legacy rigs that would generate cash and create a new fund with opportunities to ride the improvement in the offshore market as well as generate fee income for Keppel," he added.

Keppel's Board declared an interim cash dividend of 15.0 cents per share for H1, unchanged from a year ago, to be paid to shareholders on 21 August.

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