Keppel's Cleanest Ledger Yet: SSCI Reveal, an Apollo-Backed Rig Exit, and a Second-Quarter Inflection

H1 2026 earnings show a real turning point — SGD 106B FUM ahead of schedule, a new sponsor-stakes disclosure, and a funded pathway out of the legacy rig overhang.

BN4.SI · Earnings Call · 2026-07-30

The New Keppel, now with a cleaner ledger

Keppel's H1 2026 report is less about any single metric and more about a structural reveal. The Group CEO framed it early: “The new Keppel delivered net profit of SGD 530 million in the first half of 2026, up 25% year-on-year.” — Chin Hua Loh, CEO or Group CEO · 2026-07-30 That headline is the cleanest version of the conglomerate yet — and for the first time management has carved out exactly how the sponsor stakes and co-investments (SSCI) contribute. SSCI profit jumped to SGD 175 million from SGD 18 million a year earlier, a swing that legitimizes the asset-manager narrative the company has been pushing for years. The new reporting line matters because it makes the co-investor economics transparent: Keppel earns as asset manager, as a co-investor alongside its LPs, and as an operator — and the market can now see all three. The FUM milestone reinforces the story. “We surpassed our end 2026 target of SGD 100 billion funds under management ahead of schedule, reaching SGD 106 billion in July.” — Chin Hua Loh, CEO or Group CEO · 2026-07-30 A large chunk of the SGD 13.5 billion raise landed in July — outside the booked half — so fee-income acceleration is a second-half story. Management pointed to the Infrastructure Fund and a sovereign-wealth anchor (roughly SGD 3.3 billion) as the main drivers, with fees largely earned on a committed basis.

The rig overhang finds a buyer

The most consequential item is the legacy-rig monetization. CFO Kevin Chng detailed a SGD 375 million noncore net loss, including an SGD 165 million impairment on 13 rig assets. But the offsetting news is that the worst asset — the legacy rigs — now has a concrete, funded exit:

We have secured a USD 1.5 billion commitment from our LP, Apollo, to the Keppel Offshore Fund, creating a clear pathway to monetize up to SGD 3.7 billion of legacy rigs.
Chin Hua Loh, CEO or Group CEO · 2026-07-30

The contrast with the prior call is stark. In February the CEO described the rig market in hopeful but uncommitted terms: “There are some inquiries, whether to buy or to lease. So something that we are working on.” — Chin Hua Loh, Group CEO · 2026-02-05 Now the pathway is bilateral and financed — the first six operational rigs to be divested this year for roughly SGD 611 million in cash, the remaining four through 2027-28 unlocking another approximately SGD 1.3 billion. It converts a value-in-use estimate into realized proceeds and should start mechanically reducing the interest drag that drives the noncore loss. It also adds to an already active monetization program: about SGD 560 million realized in H1, with roughly SGD 1.7 billion announced year-to-date, feeding the 10-15% special-dividend framework.

M1: the sale that wasn't, and the plan that is

The other notable reversal is M1. The telco sale was terminated — a conspicuous about-face after the CEO's prior assurance. In February he was still confident: “We still remain very confident that the deal will get done. It's a bit delayed.” — Chin Hua Loh, Group CEO · 2026-02-05 Now M1 is reclassified out of held-for-sale (releasing suspended depreciation) and has a three-year plan targeting SGD 70 million of annual run-rate cost savings by 2028, with SGD 4 million already banked. Management is explicit that consolidation is still the endgame — "which we believe is needed for Singapore's telco sector" — so this is a positioning move, not a retreat. It is New Keppel operating discipline applied to a stranded asset.

Riding the global infrastructure wave

Keppel is also squarely in the path of the market's dominant themes. The global tape shows data-center power, subsea, and HPC clusters driving the strongest 360-day advancers, and Keppel's Data centers and power business are direct beneficiaries. The Sakra Cogen plant (600 MW, +45% generation capacity) commenced commercial operations at end-May, and management notes its first-month earnings helped offset softer spark spreads and Middle East conflict cost impacts. Bifrost, the subsea cable system, is now fully commercialized with all five fiber pairs, and two new cable systems — Singapore–Middle East and Singapore–Japan — are pending decisions by year-end. Fiber-pair sales, now paired with 25-year O&M contracts (about SGD 1 billion of contracted O&M value for Bifrost alone), are becoming a reliable recurring engine rather than a one-off event. Balancing that, the recurring-income base is broadening: “In first half 2026, our recurring income expanded by 13% year-on-year to SGD 467 million.” — Chin Hua Loh, CEO or Group CEO · 2026-07-30 With net-debt-to-EBITDA at 1.5x on the New Keppel (6.7x including noncore) and free cash flow swinging from an SGD 48 million outflow to an SGD 570 million inflow, the transformation is finally surfacing in cash conversion. The decarbonization and sustainable solutions business adds a long-duration growth counterweight — roughly SGD 8 billion of contracted revenue to be delivered over the next decade. The open question is whether the SSCI disclosure becomes a genuine earnings-visibility tool or just an accounting carve-out. Management says it "mirrors our business model" and will become an increasingly significant pillar. For a company that spent years derating as a conglomerate, this is the cleanest articulation yet of the new shape — a global asset manager and operator with a funded exit for its last great overhang.