May 17, 2021

Info IEC

Business & Finance Information

Keppel ‘cautiously optimistic’ about 2021; looks to asset-light approach, third party co-investments, Companies & Markets

Fri, Jan 01, 2021 – 10:28 AM KEPPEL Corporation chief executive Loh Chin Hua says...

Fri, Jan 01, 2021 – 10:28 AM

KEPPEL Corporation chief executive Loh Chin Hua says he is “cautiously optimistic” about 2021, after what has been a tumultuous year for both the company and the broader global economy.

In his New Year message to some 18,000 employees on Friday, he noted that although the Covid-19 pandemic has caused “immense suffering” and battered the global economy in 2020, it had also accelerated many trends which were already in motion such as digitalisation and e-commerce.

As part of its Vision 2030 roadmap, Keppel had in September identified assets worth S$17.5 billion to be monetised over time.

Since the start of October, the company has announced divestments of more than S$1.2 billion. With this, Mr Loh says Keppel is well on its way to meet its asset monetisation programme of S$3 billion to S$5 billion over the next three years.

“Going forward, we will increasingly adopt an asset-light approach across our businesses, and tap third party co-investments for growth, allowing us to not only use our balance sheet more efficiently, but also earn multiple income streams across the life cycles of the assets that we develop, operate and manage,” he said.

He added that in 2020, Keppel Capital had raised close to S$4.5 billion, including commitments from large global institutional investors, which reflects the strong demand for assets with cash flow that can serve as long-term inflationary hedges.

As part of Vision 2030, Keppel had also announced a strategic review of its offshore and marine business, including organic and inorganic options amid the sector’s challenging environment.

However, Mr Loh stressed that “business as usual is not an option” given the global energy transition and severe challenges facing the sector.

Technology will also be a key enabler in the realisation of the roadmap, and Keppel will continue M1’s transformation into a digital connectivity platform following the telco’s win of a 5G network licence.

The conglomerate is also deploying proptech solutions across its urban development business, and digitalising operations to improve productivity and provide better value propositions to customers.

Looking ahead, Mr Loh said that views on 2021 have been divided. While many believe it will be a much better year for the international economy, others caution that the recovery may be uneven and dampened by the withdrawal of government stimulus packages.

“I will not speculate about when and how exactly the recovery will play out,” said Mr Loh. “The priority for Keppel is to ensure that we are well-prepared for different scenarios that may unfold, and have the necessary resources to seize opportunities that may arise.”





Source link