DEAR SHAREHOLDERS,
2024 was a pivotal year for Keppel, as we completed the first year of the Company’s transformation from a diverse industrial conglomerate into a global asset manager and operator, focused on Infrastructure, Real Estate and Connectivity.
Strong Performance
Despite a highly volatile macroenvironment, marked by high interest rates, escalating geopolitical risks, technology disruptions and trade tensions, Keppel delivered strong performance. In FY 2024, our net profit from continuing operations was $1.06 billion, about 5% higher than $1.02 billion in FY 2023, excluding the effects of the legacy offshore and marine (O&M) assets1. Including these effects and the discontinued operations, our net profit was $940 million for FY 2024.
All three segments, Infrastructure, Real Estate and Connectivity, were profitable in 2024. Infrastructure contributed the highest profit at $673 million, while Connectivity recorded the highest earnings growth of 45% year on year (yoy).
We continued to make good progress against the targets that we set and disclosed for the Company. These include growing our Funds under Management2 (FUM) to $100 billion by end-2026, with a view to achieving $200 billion by 2030. By the end of 2024, we have achieved an FUM of $88 billion, and are confident of reaching our target ahead of schedule. Asset management fees3 likewise rose strongly by 54% yoy to $436 million, through both organic and inorganic growth.
As part of Vision 2030, we have focused on improving the quality of earnings by growing recurring income. In 2024, our recurring income was $766 million, making up 72% of our net profit from continuing operations4. Over the past two years, recurring income has consistently represented more than 70% of net profit, and was much higher than the 21% in FY 2021.
We have also made good progress in asset monetisation. Since embarking on our $17.5 billion asset monetisation programme in October 2020, we have announced close to $7 billion in assets monetised, including some $1.5 billion5 in 2024. We will continue to work towards our interim target of $10-$12 billion by end-2026.
Supported by our asset-light strategy, our Return on Equity (ROE) has been steadily improving. In FY 2024, our ROE4 from continuing operations reached 10.1%, compared to 9.5% in FY 2023.
As we transformed and integrated the Company, we not only removed silos, but also flattened Keppel’s organisation structure, making it more streamlined, agile and efficient. Through disciplined restructuring, we achieved our target of $70 million in recurring annual run-rate cost savings two years ahead of schedule, and are aiming for additional savings of $50 million per annum by end-2026, through further cost optimisation and harnessing the power of cloud and AI.
Considering Keppel’s strong performance, the Board of Directors has proposed a final cash dividend of 19 cents per share. Together with the interim cash dividend of 15 cents per share, we will be paying out a total cash dividend of 34 cents per share for the whole of FY 2024, the same as that of FY 2023.
