The Positives
+ Urban development led the charge with 16.7% gain in sales. Keppel Land recorded 72% higher home sales to S$740mn, underpinned by strong China (+2.8x YoY to 830 units) and India (+1.8x YoY to 800 units). It has increased focus on trading projects, which have faster turnaround and require lower working capital. About S$280mn was raised from the disposal of 3 assets in the Philippines, Myanmar and Vietnam. We believe Keppel Land remains the key earnings driver. It accounted for 44.8% of FY22 net profit.
+ Higher sales of power, renewables and energy-related services under a subscription model. Energy and environment posted 3% growth in revenue to S$1.03bn. In addition to higher sales from power and renewable energy, Energy-as-a-Service (EaaS) offering has gained traction with > S$320m subscriptions secured. The tenure, however, is not disclosed. This covers services such as energy supply, cooling services, energy optimisation and analytics and electric vehicle charging. Renewable generation capacity grew 9% since end-2022 to 2.8GW, of which 65% is operational.
+ Disposal of Keppel Offshore and Marine resulted in a gain of S$3,300mn. It has also distributed S$3,845mn worth of SembCorp Marine shares (equivalent to S$2.19/Keppel shares) to its shareholders at end Feb. About 5% of SMM shares are still held in escrow, equivalent to S$0.237/Keppel share.
The Negatives
+ Net gearing has risen to 0.83x from 0.78x at end 2022, due also to lower total equity after the distribution-in-specie.
Peggy has been a sell-side equity analyst for 22 years and a fund manager for 15 years.
