These trends, Mr Loh said, are driving demand for Keppel’s solutions.
He is also especially optimistic about the infrastructure sector, noting that infrastructure is expected to be one of the fastest-growing asset classes over the next few years.
“A significant amount of capital will be required not only to replace ageing infrastructure but also to provide more advanced solutions needed for sustainable development,” he said.
As at end-2023, Keppel’s growing base of infrastructure-related supply and service contracts stacked up to $4.3 billion, with revenues to be earned over the next 10 to 15 years.
In financial year 2023, the group’s recurring income rose 54 percent year on year to $773 million, mainly led by improved contributions from its infrastructure segment.
According to Mr Loh, Keppel has become more asset-light and shifted away from lumpy engineering, procurement and construction profits towards steadier trading and fee-based income.
“We are excited by the many opportunities in the infrastructure space. We are confident of not just sustaining our performance but also growing both profits and returns from this segment through our asset-light model,” he added.
In 2023, the company divested its offshore and marine business and delivered a record high full-year net profit figure in its 55-year history.
“Our earnings, now much more recurring, should attract growth multiples, rather than being valued based on price to book and discount to revalued net asset value with a further holding company discount,” Mr Loh said.
He added that 80 percent of analysts who cover Keppel no longer apply a conglomerate discount to the counter.
Despite the notable progress, Keppel is still looking to drive capital-efficient growth.
The group announced the monetisation of $5.4 billion out of a $17.5 billion pool of monetisable assets on its balance sheet as at end-2023.
As at end-2023, Keppel also had total assets of $26.8 billion on its balance sheet, a decrease of about 17 percent from end-2021.
Over the same period, the group’s funds under management (FUM) rose more than 30 percent to about $55 billion from $42 billion at the end of 2021.
Mr. Loh said that the group will liberate a further $6.3 billion from its balance sheet when it finishes the monetisation of its vendor notes and landbank, and this will allow Keppel to hit its cumulative monetisation target of $10 billion to S$12 billion.
In terms of mergers and acquisitions (M&A), Mr Loh said that Keppel is looking out not just for good assets, but also top talent and strong capabilities that can add value to the group and bolster its value proposition to its global LPs.
He said Keppel cannot rely solely on M&A deals to hit its $200 billion FUM target, and will have to look at inorganic growth opportunities too.
Looking ahead, Mr Loh said that Keppel will continue to streamline itself as a company to become fitter and more agile.
“We will further invest in our human capital, developing our people to remain relevant in a changing landscape, while bolstering the company’s capabilities in areas such as asset management and digitalisation. We will fully leverage technology, including artificial intelligence, to do our jobs better and faster.”
