While Keppel’s core business performance is encouraging, the persistent drag from its non-core portfolio raises questions about the speed and effectiveness of its divestment strategy. A 59 per cent drop in net profit is a significant figure that cannot be entirely dismissed as mere 'accounting noise.' The fact that legacy rig assets and terminated deals continue to erode earnings years into the company’s transformation suggests that these non-core liabilities are more complex and costly to resolve than initially anticipated.
Investors are right to be cautious when a company’s headline earnings are repeatedly impacted by impairments and deal fallout. Each time these legacy issues surface, they obscure the true performance of the core business and create volatility for shareholders. The 4.3 per cent drop in share price following the announcement reflects a market that is becoming increasingly impatient with the slow pace of clearing these historical burdens. If the non-core portfolio continues to require substantial write-downs, it risks undermining the credibility of the company’s long-term financial targets.
Furthermore, the termination of the M1 sale to Simba highlights the risks inherent in complex divestment processes. When such deals fall through, they not only result in immediate financial losses but also tie up management resources that could be better spent on growth initiatives. For the company to regain full investor trust, it must demonstrate a more definitive end to these legacy-related losses. Until the non-core portfolio is fully resolved, the company’s financial health will remain vulnerable to these recurring, unpredictable shocks, regardless of how well the core business performs.