Keppel Corp Ltd Ord

Good morning, ladies and gentlemen. Welcome to the conference for Kepo Limited's first half financial results for 2026. We have on the panel this morning, from your left, Mr Manjot Singh Man, CEO Connectivity and CEO M1, Mr Louie Lin, CEO Real Estate, Ms Christina Tan, CEO Fund Management and Chief Investment Officer, Mr. Loh Chin Hua, CEO, Mr. Kevin Cheung, CFO, and Ms. Cindy Lin, CEO, Infrastructure. We will begin the session with presentations by CEO, Mr. Loh Chin Hua, and CFO, Mr. Kevin Cheung, followed by the question and answer session. Mr. Loh, please.

Thank you, Amira. Good morning, all. The new capital delivered strong results in the first half of 2026. amidst a highly volatile global environment. Despite geopolitical tensions, the demand for sustainable digital and energy infrastructure continues to rise with accelerating AI adoption. With our integrated ecosystem spanning capital, digital infrastructure and power, Keppel is well positioned to capture opportunities in this growing market. The new capital delivered net profit of $530 million in the first half of 2026, up 25% year-on-year. This was driven by strong contributions from sponsor stakes and co-investments, as well as higher recurring income from asset management and our operating platform. We also made significant progress on our two strategic priorities – We surpassed our end-2026 target of $100 billion funds under management ahead of schedule, reaching $106 billion in July. In addition, we announced about $1.7 billion of asset monetization year-to-date on track towards our full-year target of $2-3 billion. We also achieved key operating milestones. across digital and energy infrastructure, with Bifrost fully commercialised, while the Keppel-Sakra co-gen plant, Singapore's first hydrogen-compatible and most advanced power plant, has commenced operations. Both assets are now contributing to Keppel's growing base of recurring income. In first half 2026, Our recurring income expanded by 13% year-on-year to $467 million. Starting from first half 2026, we will separately disclose profit contributions from our sponsor stakes and co-investments or SSCI to provide greater clarity on the new capital's performance. The new reporting approach mirrors our business model Profits are earned as an asset manager, as a co-investor in our funds, REITs and trusts, alongside our LPs and unit holders, and as an operator. Beyond aligning our interests with those of our LPs, SSCI also provides an important source of earnings and cash flow for the company. In first half 2026, Profit from SSEI increased significantly to $175 million compared to $18 million in first half 2025. As our FUM expands, SSEI will become an increasingly significant pillar of the new capital's earnings and growth. In the first half of 2026, the non-core portfolio recorded a net loss of $375 million Due mainly to impairments taken for our legacy rigs, interest costs attributable to the legacy rigs, as well as depreciation and amortization adjustments with the termination of the M1 Telco sale. Including these accounting losses, the company's overall net profit for the period was $155 million. Importantly, Our financial position continues to strengthen. Our free cash flow swung from an outflow of $48 million in the first half of 2025 to an inflow of $570 million. The new capital's annualized return on equity improved to 15% in first half 2026 compared to 14.7% in first half 2025 while the net debt to EBITDA remains steady at 1.5x. Across capital, AI is increasingly embedded into our investment, asset management and operating activities. This, coupled with continued streamlining, has contributed to over $100 million in recurring annual run rate cost savings. We are also using AI To improve our value proposition to our customers and LPs, expand revenue opportunities, and look for new profit pools. Reflecting confidence in the company's progress, the Board has declared an interim cash dividend of $0.15 per share for first half 2026, unchanged from a year ago, which will be paid out on 21 August 2026. We have made good progress in the monetization of non-core assets. The rigged transaction announced earlier this week is significant. We have secured a US $1.5 billion commitment from our LP Apollo to the Capital Offshore Fund, creating a clear pathway to monetize up to $3.7 billion of legacy rigs while expanding our FUM and fee income. The divestment of the first six operational rigs is expected to generate cash proceeds of about $611 million this year. As the remaining four rigs are completed, they can be divested to the fund, unlocking another approximately $1.3 billion in cash over 2027 and 2028. This will not only improve our gearing, but also increase funds for higher return opportunities and to reward our shareholders. At the end June 2026, we have completed and realised monetisation of non-core assets of approximately $560 million, a portion of which would fund special dividends for the full year. At the same time, The gross asset value of the Nong Corp portfolio, including M1's telco business, was $13.7 billion. These figures do not yet reflect the transactions announced in July. In the first half of 2026, we generated $200 million of asset management fees, We also completed 3.1 billion of acquisitions and another 2.4 billion of divestments across our private funds and listed vehicles. As at end July, we achieved $106 billion in FUM, surpassing our $100 billion target for 2026. This marks an important inflection point in Keppel's growth as a global asset manager and operator. Thank you for joining us. We can originate differentiated assets, create alphas through operations and offer our LPs access to compelling investment opportunities supported by our private funds and listed evergreen real estate and infrastructure trusts. In our power business, The new 600MW Capital Sacra co-gen plant commenced operations smoothly at the end of May, increasing our generation capacity by 45%. Its first-month earnings helped to offset softer spark spread and cause impact from the Middle East conflict in the first half of 2026, contributing towards the 9% year-on-year EBITDA growth for the power business. We are also developing a pipeline of proprietary energy transition and infrastructure projects across the low-carbon hydrogen and ammonia value chains, as well as the importation of up to 1 GW of low-carbon energy into Singapore. Keppel's integrated capabilities in energy, cooling and water have enabled the planting of new AI-ready hyperscale data centres and our innovative Floating Data Centre. They will also empower us to originate and develop the next generation of digital infrastructure projects. Following the commercialisation of all five Bifrost Fibre pairs, we are advancing discussions with joint-built partners, and selecting landing sites for two possible new subsea cable systems linking Singapore to the Middle East and Japan. We expect to take a decision on this project by year-end. Our asset-light approach extends beyond digital infrastructure. Hanoi Centre, our first retail mall in Vietnam's capital, is one such example. Through a master lease arrangement, we repositioned the property through active asset and retail management leveraging our deep operating expertise in Vietnam to earn a recurring profit from rents. We continue to explore opportunities for consolidation for M1 which we believe is needed for Singapore's telco sector. Based on what we have observed in the region, Operators that have undergone consolidation have typically seen a 10-15% ARPU uplift, leading to more sustainable markets. In the meantime, we are focused on strengthening M1's performance to maximize its strategic value in any future industry consolidation. A three-year business plan has been established, to raise productivity and structurally reset M1's cost base. This will strengthen M1's profitability and competitiveness while maintaining resilience, cybersecurity and customer experience. Our initiatives are expected to deliver an annual run rate cost savings of $70 million by 2028 Year to date, we have achieved cost savings of $4 million per annum and aim to reach $10 million per annum by the end of 2026. To conclude, the progress we have made reflects the strengths of New Capital. We have bolstered our earnings, expanded our asset management business to $106 billion in FUM, delivered landmark assets like the Sakra Cogem plant and Bifrost, and establish a clear pathway to monetize the legacy rates. As a global asset manager and operator, we have demonstrated that we are increasingly bringing together capital, operating capabilities and proprietary investment opportunities to create value for our LPs, shareholders and customers. Looking ahead, as demand for power and digital infrastructure accelerates, Keppel's integrated ecosystem positions us well to capture these opportunities and power our next phase of growth. Our CFO, Kevin, will now take you through details of the company's financial performance.

Thank you, CEO, and a very good morning to all. I shall now take you through Keppel's financial performance. While new Keppel performed well, Our net profit for first half 2026 was 155 million, 59% lower than the 378 million for first half 2025, due to results from the non-core portfolio which I will elaborate later. Consequently, annualised ROE decreased to 3.6% from 7.2% in first half 2025. Net Debt to EBITDA increased to 6.7 times at the end June 2026 from 5.8 times at the end December 2025. Pre-cash inflow was $570 million in first half 2026 compared to an outflow of $48 million in first half 2025. This was underpinned by strong cash inflow from investing activities with higher divestment proceeds received during the first half of this year. This was partly offset by lower cash inflows from operating activities as a result of higher working capital requirements. Excluding non-core portfolio for divestment, New Capital delivered profit of $530 million, 25% higher than the $424 million recorded in first half 2025. I will first cover non-core portfolio for divestment before presenting the financials of New Capital to provide greater clarity on our performance excluding the effects of non-core portfolio for divestment. Net loss from non-corp portfolio for divestment was $375 million in first half 2026. Net loss from legacy offshore and marine assets was $278 million. As announced earlier this week, we have put in place a program to progressively monetize up to 10 legacy rigs through a new private fund, Capital Offshore Fund. This marks a further milestone in our transformation as it establishes a clear pathway for the progressive monetization of our legacy rigs. while improving gearing and unlocking capital for reinvestment and to reward shareholders. Arising from this, we have recognised an accounting loss of $165 million from the impairment of 13 legacy rig assets, including recycling of foreign currency translation loss to profit and loss, net of write-backs in cost provisions. The impairment was based on the group's assessment of the recoverable amounts of the rigs, taking into account the monetization program through Keppel Offshore Fund of up to 10 RICs announced earlier this week and the business plans of the fund. The remaining loss on legacy O&M assets was due to interest costs attributable to legacy RICs and expected credit loss recognized on receivables from Chris Energy, partly offset by gains on CITRM shares which have been fully divested. Net loss from property-related non-core assets was $32 million, mainly from operating losses on investment properties and fair value loss on investments, partly offset by net fair value gain on investment properties. The first half of 2025 benefited from gains related to divestments in China and Vietnam. Investments, M1 Telco and others recorded net loss of $65 million. This was mainly due to the release of financial year 2025 suspended depreciation and amortization following the termination of M1 Telco divestment, where M1 ceased to be classified as a disposal group held for sale, as well as fair value losses on investments. Moving to New Capital New Capital performed well, with net profit increase of 25% year-on-year to $530 million. Excluding the loss from dividend in specie of capital REIT units, otherwise known as DIS loss, all three segments were profitable, with higher earnings from infrastructure and connectivity. Analyzed ROE increased to 15% from 14.7% a year ago. Net debt to EBITDA was 1.4 times as at end June 2026, unchanged from end December 2025. Pre-cash inflow was $244 million in the first half of 2026 compared to an outflow of $179 million in the same period last year. In line with growing recurring income, new capital generated healthy cash inflows from operating activities. Divestments and dividends received were reinvested to fund investments in sponsor stakes and capital expenditure. As mentioned by CEO earlier, starting from this reporting period, we will separately disclose profit contributions from our Sponsor Stakes and Co-Investments, or SSEI, to provide greater clarity on New Capital's performance as an asset manager and operator. At the same time, we continue to provide the breakdown between recurring operational earnings and market or event-driven valuation and divestment profits. Supported by stable performance from asset management and higher contributions from operations, recurring income rose 13% to $467 million from $414 million a year ago. Our fund management and investment platforms achieved net profit of $247 million, more than double first half 2025, led by stronger contributions from SSEI. As a result of lower divestment and revaluation gains, net profit from operating platform was lower at $349 million Moving on to our segmental performance Infrastructure segment achieved strong earnings with a net profit of $538 million 55% higher than the $346 million a year ago Asset management net profit was higher than the prior year mainly from higher asset management fee revenue and Acquisition Fees, partly offset by higher costs and the absence of divestment fees. Profit contributions from SSCI rose significantly to $178 million, underpinned by gains from the disposal of a partial stake in Kepo Malimau Coaching Plant and our interest in 800 super holdings, as well as higher distribution from Kepo Infrastructure Trusts. These were partly offset by fair value loss from co-investments. Infrastructure Division earnings grew $339 million, supported by better performance from our integrated power, as well as decarbonisation and sustainable solutions businesses. Kapo Sekar Cogen Plant commenced commercial operations at the end of May, and contributed positively to offset the softer spark spreads and cost impact from the Middle East conflict in first half 2026. Real estate segment recorded a net loss of $19 million in the first half of 2026, compared to a net profit of $98 million in the previous year. Excluding the GIS loss, the segment would have been profitable at $32 million. Asset management net profit was lower at $36 million, mainly due to lower contributions from AMON, Arising from the change in Fund 5 fee basis as it reaches the end of its investment period, as well as higher costs. This was partly offset by divestment fees and higher asset management fee revenues, following acquisitions by Capital REIT and fundraising by Capital Education Asset Fund 2. Net loss from sponsor stakes and co-investments was largely due to losses from dividend in specie of Capital REIT units. Real Estate Division recognized lower year-on-year earnings, mainly due to the absence of gain from the partial disposal of Saigon Centre Phase 3 that was recognized in first half 2025, lower fair value gains on investment properties, and lower share of profits from SSCEC. Net profit from connectivity segment was $77 million, 54% higher than the $50 million a year ago. The increase in asset management net profit reflected higher asset management fee revenue following acquisitions by Capital DC REIT and funds raised by Capital DC Fund 3, partly offset by higher costs. Profit contributions from SSCI tripled from $18 million to $55 million, underpinned by gains from the customer commitments secured for the third and fourth fiber pairs of the Bicross Cable System and higher contributions from Capital DCE. This was partly offset by Fair Valley losses from private funds. We expect to recognize gains from the fifth committed fiber pair when it is handed over to the customer in second half of 2026. Operating Division's earnings were lower, as the first half of 2025 had benefited from valuation gains from a data center investment. This was partly offset by higher year-on-year contributions from the technology solutions business, as well as higher fees from data center project management and network operations and maintenance activities. With that, we have come to the end of the presentation, and I shall hand the time back to CEO for the Q&A session. Thank you.

Thank you, Kevin. So we'll move to Q&A. I see the first-hand raise quite quickly from Mervin. So please, Mervin, from JPM.

Hi, Mervin from JPM. Good morning to my team. So many congratulations to you this morning. So many wins in the first half. Superb at the young growth, soccer commencing, legacy rigs. Looks like you are shedding the view that capital is a conglomerate. You're now becoming a global asset manager. Asset Manager. Perhaps you didn't even need to sell M1 this year.

Did you or don't need to? Didn't need to.

Okay. Maybe a few questions. Obviously the infrastructure segment done quite well considering the lower spark spreads but maybe can you disclose the growth that you're seeing within the decarbonization business in the first half? In the first half were you forced to or Thank you, Mervin. I will ask my colleague Cindy to address these three questions. Thank you, CEO. Hi, good morning, Mervin.

First question regarding the card and sustainable solutions performance in first half. I think you have read that the total revenue under long term contract has grown to 8 billion to be delivered in the next 10 years or so. Such contracts are very interesting because it gives us visibility of the recurring income. and these contracts are also indexed against inflation. The first half DSS performance year on year has grown slightly. and the second question about the replacement gas. Yes, you would have also read that there is a forced merger declared by the upstream supplier. So in the month of April, we did source for replacement gas. Notwithstanding, we have very resilient gas supply infrastructure within Singapore. We work very closely with our customer, regulator, As well as upstream supplier to ensure that our pipe natural gas remain resilient in supply. That's number one. And number two, our fuel backup strategy continue to be intact and robust. The timely commencement of Sacra CoGen has more than offset the cost impact of this replacement gas. Your third question about slug spread. I think it is known that we have seen normalizing of spread that was grossly escalated back in 2022 and 2023. Having said that, it is not very instructive to just look at short-term movement in the slug spread because it will continue to be volatile. What our integrated power business is focused on is really securing predictable and healthy long-term contract that will provide that income visibility for the entire 1.9 gigawatt of installed generation capacity. Thank you.

Can I take the second half? Do you have the source slightly more elevated gas prices for SLNG given the post-injury conditions? Thanks.

As of now, the answer is no. We didn't crystallize any sourcing of replacement gas at elevated level for second half.

I think to be fair, the situation is still quite fluid. But at this point in time, the answer is no. Rachel from UBS. And then after that, Brandon.

Hi, good morning. Thanks for hearing my question. I have a couple. So first, if we look at slide 30, in terms of the power portfolio mix, how much capacity have you contracted? So can we say that it is a full 1.9 gigawatts that has been contracted out, and how would you account for redundancy? That's the first question.

Maybe we go one question at a time, because we've got a question quite long.

Thank you Rachel. For the Singapore power market, there is obligatory reserve margin that's required from the installed capacity. So whilst we have 1.9 gigawatt of installed generation capacity, not all will be fully contracted because of the regulatory obligation for reserve margin. Suffice to say, we have our own view of our generation strategy. We are fully contracted for SACA CoGen 2026 and 2027. So on a portfolio basis, we are healthily contracted with a certain buffer to capture some volatility opportunities when it arises. Thank you.

Thank you for that. The next question I have is that if you look at slide 58, you lay out the definition of SSCI, so that is very helpful. Thank you for including that. So there is a bit that says that SSCI includes funds that are 100% owned by capital. So could I know which funds are still 100% owned by capital?

I think maybe when we refer to 100% funds owned by capital are those where we are still fund raising so we include those as part of our SSCI disclosure as we have articulated in the definitions but I think for

But for the SSCI, the result we have seen is there's no 100% funds owned by Kapo. It's just acting as a glossary. They just include it in part of the accounting definition.

The current losses that we've taken, the impairments, still stays at non-core.

But when the six weeks go in, we will receive 50% in cash. The other 50% is still held by capital in a fund. So going forward, it will be accounted under the new capital or under SSCI.

Brandon first?

I want to ask three questions. The first one is, I think during the M1 termination briefing, you mentioned that you have to bring forward some divestment notes related to Axial energy after. So with the mid-coast sales, does it mean that You don't have to do that anymore. You can look at the contact of that amount. So that's my first question. The second question is on the KOF Fund. I think when you look at page 17 of the financials, there's quite a very comprehensive explanation of the state's asset value, including the range of the US$1.8 million asset value changes. I will ask Kevin to respond to the second question. On the first question,

Short answer is no. I think we are constantly looking to monetize the non-core portfolio. We have set a hard target of 2030 to substantially monetize the non-core portfolio but there's nothing to stop us from doing it earlier if we can. by giving ourselves more time will allow us to crystallize this monetization at the appropriate valuation but it doesn't mean that if we have a chance to do it earlier we wouldn't take it I think the key is that we want We are very focused on new capital and growing new capital. But we also know that we are also required to take care of business as far as monetization of the non-core portfolio.

If you are referring to page 17, that's the disclosure around our approach to value those weeks. As we all know, the REITs are valued on a value-induced basis. So what actually happens basically is we will go out to industry experts to get REITs and then we get another independent party to calculate the values for these REITs. This mode just serves to basically explain to stakeholders on how we go about doing it. So for example, to your point where we refer to kind of sale values. The business plans of the fund actually has considerations for sale at a certain point in time. So we have to bake that into our valuation approach. And then the other part that you mentioned about if schedule delays by 12 months, there will be impact of this. Well, that goes into the value in use calculation. That's to arrive at the value that we carry in our books for the uncompleted ones.

So basically you mentioned that the beginning forward is going to be sold and that part is still going to be sold. So does that mean that if there is a delay, there is a potential for a 390?

Only if there is a delay, but we are starting off the constructions for those rigs. The model requires you to assume that there is a sensitivity to it, but we're not planning for any delays simply because we have a path forward now for those rigs as an option for the uncompleted rigs.

I think the other thing to bear in mind is that because these are all projections, it's very dependent on the market conditions. Our belief and the belief of Apollo as the LP in the fund is that the rig market as we mentioned is on the mend. It may still take time for the rates, the day rates and the value to reflect the underlying fundamentals. But the fundamentals are improving day by day. So I think that's really, so the assumptions can also change over time. But the basic thesis is that this gives us a chance to partially monetize our stake but we can still also take advantage of any potential which we believe will have an improvement in the rig market. Sorry, I think Joy first.

Thank you for the opportunity. A few questions from me. First of all, just in terms of asset management business, you had significant fundraising in July. How should we think about deployment going forward and then associated fees that will come through? First off, I think fee increase is still sort of lagging behind fundraising. That's my first question. Second question on non-core assets, the VIX impairment. Going forward, are we still going to see more? There is one element of interest associated with the portfolio, so we still carry the remaining part of the VIX, but we still have more interest to be impaired for the forward financial scale.

Thank you. Chris, you want to answer this?

Hi, good morning. In terms of our asset management, I think like we said, I think Chew Huat mentioned earlier, this is the fund raise has actually, it's a significant inflection point for us in terms of asset management business. And I think because of the strong Thank you very much. I think the team is working hard to look, they are all working on the different transactions. There's a lot of transactions that we're looking at in the digital infrastructure space. I think as we have earlier alluded to, we have to make decisions on the, after Bifrost, we have two more likely cable systems that we're looking at. So we have to make decisions on that. We also have significant infrastructure, renewable, Subtitles by the Amara.org community So in terms of deployments, I think the team is working hard to look at these. And I think for the fees that you would be expecting, I think you can look at the fund raised, which is $13.5 billion, and you can use the annualized fee rate to roughly compute the kind of increase in fees, in maximum two of these.

Maybe just to add to what Chris has just said, a significant part of the FUM raised, the 13 point something billion, was done in July. So it actually falls outside the first half accounting period. So you would expect that the fees would start to kick in in the second half. Now, your question is on Unfortunately, we can't forecast impairments. As I mentioned earlier, the belief is that the market is improving. But at the same time, there is this exercise that we have to take every six months to test for impairment. But we can't forecast the impairment. But as I mentioned earlier, the REIT fundamentals are improving. As far as the interest cost is concerned, The six rigs that have been completed monetized into the fund, then they will be deconsolidated from our balance sheet. So at least part of the interest cost for the rigs would then not be affected. So after Tan Hsuan is Ma Yang, sorry. Hi, good morning.

My first question is about the Ethereum growth. I know that in the slide, the opportunistic M&A was highlighted. Can you briefly talk about how do you assess whether an acquisition involves a surrogate fee and what are the financial considerations that you would think about?

In terms of our FUM growth, I think as we said, we are always looking out for good M&A opportunities. Besides just the platform increasing of FUM and in terms of our asset management platform, we are also looking at M&As in all, whether it's for infrastructure deals, for digital, for our connectivity divisions as well. So there are always a lot of platforms out there for sale, and the funds are actually able to participate in such platforms' acquisitions. So the M&A activities are quite broad-based. Besides looking at just Capital Limited, we're also looking at it from Deals' perspective for the various funds that we have.

Thank you.

Second question is on non-core portfolio for divestment. I think there is a 2.4 billion of cash in the Super Bowl today. Can you break it up into cash in the Super Bowl and explain why is this included as an above point today actually beyond time?

Maybe I ask Kevin to address the show. Hi, Sharon. I don't have the immediate detailed breakdown of cash and silver. Maybe just to answer your question, what those represent. If you think about a non-core portfolio for divestment, the way we disclose it is gross asset value. Included in some of these are basically cash that are associated with these assets. To give an example, and we've made this statement before, The costs required for us to complete the remaining completed rigs are sitting as part of this $2.4 billion because they are in non-core portfolio for divestment. Which is why we have always said that in order for us to complete these rigs, we won't be pumping any more cash in there because the cash is in there. Now, the other parts of the cash and receivables are in some of our property projects. For example, if they still continue to run, there will still be receivables there. So all of these basically will wash out once we divest them. When the cash is utilised, they need to be utilised to realise the value. The excesses will then come back once we monetize those assets.

I see that there is actually a guaranteed return on the fund. Can you share if the guaranteed return is above or below what the current assets yield is? I'm trying to understand, are there any scenarios whereby there will be recalls with Apollo or you actually need to recognise the loss beyond your determination?

Currently, the yield that Apollo will receive will be roughly matched by the day rates that we will get. So which means that we don't believe there will be a scenario where, currently we don't believe there's a scenario where we will have to, there will be a recourse to capital. Okay, we get Ma Yang and then I will go to the online. Then I think Jay and then Siu Kee. Siu Kee looks a bit unhappy.

Yes, thank you. The first question was on energy sourcing. Now that the power plant started up and obviously you have a bit more on the city gas as well. So can you just Talk to us about the long term energy sourcing portfolio that you have and how it kind of pans out over the next one to three years. How you are thinking about the geographies and diversification of the energy portfolio. Cindy?

Hi, thanks Sio. Hi, morning Maya. From the Singapore context, Future long-term LNG sourcing will be via gas coal. But specific to Keppel Infrastructure Division, our gas supply portfolio, to your question, for the next one to three years has already been spoken for. So whatever that we require for our generation capacity will be fulfilled through our existing pipe natural gas contract as well as our existing LNG contract. In fact, we were very diligent in extending our PNG contract panel even pre-crisis. So that part gave us a pretty resilient and cost-competitive fuel supply for the next one to three years.

I think just to follow up on that because for the next one or two years, can we kind of think about most of the contracts being now cost plus incrementally for you because there is still one year, there are around 8 to 10% of the contracts which are expiring over the next one year. How are you kind of thinking about the contract renegotiations around that, what you are seeing in the market?

So I think in terms of the power plans that's available in the market, there's either the fewer pass-through or index against commodities, in this case brands, or it could be fixed price contract, or in this case we will then do our own diligent hedging. So this won't change in the context of having gas coal. The pricing plan is still out there, either Lix, or Sue Cosmashu.

The second question was more on Airmont Fund 6 and the 13 billion overall that you kind of raised during the second quarter. If you can give us broad strokes in terms of where will you deploy that capital, how you are thinking about it, more at the Airmont level as well as the sovereign wealth fund that you kind of raised capital from. Like where do you see over the next few years this deployed and which parts?

I think maybe for the AMON fund, just to be clear, it is for Europe, so it will be deployed in Europe and the fees are earned on a committed basis so which means that the deployment, the case of deployment will actually not affect the asset management fees you basically charge fees based on committed capital so as the fund raise, they are not fully closed yet, they have a first closing So if the fund raise continues, then you will expect that the asset management fees they attract will grow as well. On the second question, maybe I ask just on the sovereign wealth fund.

On the sovereign wealth fund, actually, even though they have given us a very strong FUM, about $3.3 billion, part of it is allocated to our flagship funds. So we will go into our connectivity data centre funds, we will go into our infrastructure funds. So those funds also attract fees on a committed basis. But then there are also separate ports that's available for us to do direct co-investments. So we will also earn fees on those funds deployed directly.

My last question was on the balance sheet. There has been a big increase in working capital in the first half this year. Is it largely driven by infrastructure because of energy prices and startup of the power plant or is it something else that we need to look at?

Maybe Kevin?

Our working capital changes come from different parts. Infra is one of them, but we also have areas like for M1 and capital technology solutions that are part of that working capital. I think that's the main driver for the increase in working capital requirements. Coming back to the whole working capital requirement, if you look at what I've said earlier on our free cash flows, we're still generating pretty healthy free cash flows from both operating and investing activities. So they're all within the expectation around how those businesses are growing. So I don't think we're seeing any abnormal increases in working capital requirements across the businesses that we have.

Thank you. So I'll go to the online, a couple of questions. Thanks. Thank you for being very patient. First question is from Alexander Han of Yon Global, Singapore. What is the utilization rate of Sacra CoGen for the one month contribution and what is the ramp up schedule? I think you've heard from Cindy that it's fully committed other than for the spinning reserves. The next question from the same gentleman. For SSCI, what drove the increase of infra-operational net profit from $7 to $27 million? What is the split between base fees and any performance-driven fees? How much of the FUN is equity versus debt?

Thanks for the question, Alexander. In terms of the increase of the infra-operational net profit, it's driven mainly by higher distributions from capital infrastructure trusts, lower interest and also higher returns from a private fund.

As it relates to split between base and performance fees, I think generally performance fees are still a small proportion of our base fees but of course we would expect that this will continue to grow as the funds mature over time.

And then the last question around, if you're asking about leverage, our FEM is on a gross asset value basis. On a portfolio basis, it will not exceed more than 60% for the leverage.

Maybe I take the next question is from Tom Taylor of Infrastructure Investor in Australia. What key updates can you share on Capital Infrastructure Fund and on Capital Data Centre Fund 3? Chris?

I think on Kapol Infrastructure Fund, I think the team is looking at, we have actually invested our first deal in Global Marine, which is a subsea cable length vessels company. And I think the business is doing really well because of the number of marine cables that were displayed, not only by Kapol, but by a lot of telcos and a lot of hyperscalers. So that business is doing really beyond our expectations, so we like that. So we like the full ecosystem, as you said, whenever we invest, we look at the full ecosystem, and where there are essential services, monopolistic criteria, I think that's where we like in terms of our infrastructure play. For data centers, I think there's huge interest in the funds as well by investors, largely because of AI, that's what you are seeing in AI, as well as the demands from whether it's inference and training and all that requirements for hyperscalers. So I think we are doing deals now in South Korea as well. We are also looking at deals in Japan. And so we are actually quite focused in a key market for Singapore, Australia, where we announced a 720 megawatt power land, as well as in places in Japan and South Korea.

Anyway, for Fund 3, Data Center Fund 3, our target fund size is US$2 billion and we should be getting very close to that, if not exceeding that. Okay, I think the next question is from the same gentleman. Is capital infrastructure fund beginning to look beyond Asia for opportunities? Well, she just explained, Christina just explained that GMG, So if so, what triggered this change?

I guess for infrastructure, it's very hard to just closet it within specific geographies because cables, it's actually global. Even Bifrost, it was from the US through Guam to Singapore. So you cannot really labor it like it's an Asia infrastructure fund because it's actually quite global. Our cable-laying vessels are also very global. GMG also works very much in the Atlantic zone where they have very long-term good contracts with the telcos. So it's a bit difficult for us to lock it up in terms of infrastructure fund that is just Asia-related.

Okay, maybe now I switch back to the people that are present here. James?

There's been a few questions on the $13.5k fund raise and you've provided some colour on where some of that's come from for Ayrmont and the SWA fund. Are you able to provide any more colour on that because it is a big number and the other question that I have is just how much of the fee tax for that $13.5 billion, can you earn on a committed basis? I think roughly so far it's just those two funds that you talked about. Chris?

I think for M1s, like Chin Hua has said, it's actually, if you take the $13.5 is approximately like 45% of it, it's for the M1 fund, and that is really on a committed basis. On the sovereign wealth fund itself, as we said, part of it is allocated to the data centre fund as well as the infrastructure fund. So those are also on a committed basis. And as mentioned earlier, it's about 3.3 out of the 13.5 billion raised. So that will be the percentage roughly that you can use. and I think the Coff Fund is also... For Coff Fund actually you get, actually very interesting, you get upfront fees because we have advisory and structuring as well as the ongoing asset management fees which is based off typically like 2% of the committed capital.

Okay, one more if I may. If you look at the write-down for the REITs this period, how much of that was allocated to REITs 10 to 13?

We don't give the breakdown but I think earlier this week when we announced the sale of the first six weeks into the fund, we did give a number and I think it's just below $100 million. So now we've announced this number which includes that number and the total is 1665. Thank you. Okay, I'm back to Siu Kee and then later back to Rachel.

Thank you. Rick Koh, what is the average daily that you assume for the semi-high spec JU and can do?

We don't disclose that.

Can we use the market rate?

Market rate, you must understand, ours is a bare boat charter. So the market rate, if you are referring to market rate, you still have to figure out what to back out from the operation. So we typically don't take the operating risk.

Do you need to find charters for the four weeks before you sell or start construction and who is helping you to find charters?

Maybe I refer to Cindy who has been quite actively helping us do this.

For the weeks, we have seen very active enquiry in the course of the last four quarters. In fact, the last two quarters have intensified short. List of potential charterers to support the tendering campaign. And that is why we are very cautiously optimistic in terms of restarting the completion of the advanced spec offshore rigs, in particular the dual ships and potentially in sequence the semis for harsh environments.

Okay, thanks. Just on infra, without SAKRA, just to confirm that without even SAKRA, your original plant, your operating profit has actually grown. That's correct. So that's quite impressive, Ken. Thank you.

That's my sort of question, it's a compliment.

Out of the 49% that due for renewal, the 1 to 3, what's the proportion of those before second half 2024?

I don't have the breakdown immediately, but I'm surprised to see, arising from the recent Middle East crisis, we do see a window of opportunity to re-contract some of this. In the first half, we managed to grab some, and then we saw some window of opportunity upcoming in the second half this year.

So those that were one to three years, they had actually started to even talking to you in different times of the year?

Yep. Maybe I should put it the other way also. We are also actively prospecting some of such customers to help the risk of their contract expiry. So it's mutual, not just them coming to us, but we are also actively seeking out some of our portfolio customers, in particular those that are high value or high volume.

I just have one more question on infra. So I know that you say that it's fully committed. Can we assume that PLF is really normalised from day one?

Yes, actually this is a very good showcase of the Capital Infra's integrated powers capability. Even during the testing and commissioning phase, this arises right at the peak of the Middle East crisis. But because we have our existing in-house O&M team that we harness to support the testing and commissioning, we manage to not only bring the plant on stream, on target, In May, what we saw is the entire performance in June and almost the whole of July has been on point in terms of availability, in terms of hit rates, and I think we are very happy with the chosen technology and execution to date.

Thanks. I just have one last question before I jump back quickly. On asset monetization, assuming today is the 31st of December, and then you have realized your $611 billion index, you also realized the investment would have been $1.17 billion, correct? Yes, correct. So what are the assets, so now I went back to the theory, What are the assets that UHD are quite confident to realise and complete from now until 2026 to which? Realise and complete to which?

I can't give you the projections. I think we are working on a few things. I think there are also some some assets that we have announced earlier and they are not completed yet so when they are completed in the second half they will also be added to this to this pot which you are trying to figure out what the special dividend is I presume there will be some transactions that we work on where it will be quite straightforward that means the time from the announcement to the completion is quite short but there will be some that might you know take a few months because of some regulatory approval just like just like for the six weeks that you just mentioned so some new ones coming in but they may be quite fast to close then some may actually track out till you know a bit longer

What are the assets other than 4 weeks?

You are talking about the new ones? You are talking about N2026?

Correct.

So the 4 weeks definitely will not likely go in by N2026? Beyond the Forex, there will be other things, but I can't tell you what it is. It's not disclosed.

Hi, so just to clarify on the total monetization and how much you're paying out, right? So the last result you said that you'd be paying out on gross value of monetization. However, for Ritco, you're talking about monetization based on $611 million, which is realized. So is it correct that it is gross value of monetization that is realized instead of gross value post-op?

Yes, realized in cash.

Okay, so maybe let's say hypothetically one day you are able to monetize M1 for the same value of what Simba paid, but in this case it may only be in 50% cash and 50% in non-cash payments. So would we, am I right to conclude that If that is the case, then you will only be paying out of the 50% that is paid in cash and not the entire value of the monetization.

That's correct.

Thank you.

But maybe just to make sure that it's absolutely clear, if the initial transaction is 50% cash and 50% shares, then the 50% cash That's what the special dividend will be based on. But later on, if the next 50% theoretically is in cash, then the special dividend will still accrue on that 50%.

Okay, thanks for that because I guess I'm just trying to understand how much when you talk about your total monetization, how we are able to kind of calculate the exact amount, the exact basis of how you will pay your 10% to 15%.

So I hope this is quite clear. I think our definition of non-core is already fixed. We don't intend to have more non-core. So what that means is that that number, over time as we monetize, the special dividend will be based on that. Okay, sorry, Dexter.

Hi, good morning. Can I ask, I'll just ask what I've typed. On the real estate side, the Corp, there were some losses. Can I answer where they come from?

Sorry, say that again. D-I-N. Oh, okay.

Yeah, because of the K-weed distribution in species. Oh, sorry. Non Corp.

The difference between last year and this year for the Non Corp was we were able to recognize Saigon's Center Phase 3, as well as fair value gains from one paramount, as well as some re-measurement gain from our watermark business. Is that what you mean?

There are some losses on I12 when we sell.

We have operating losses for some of our existing assets. The fund life typically is about 8 to 10 years.

So the earlier real estate funds have been

This is part and parcel of the cycle of closed-end funds. The older funds over time will run off and then you have new funds coming in.

It's a bilateral deal. A lot of our transactions are bilateral. When we bought Ammon was also bilateral. No process involved. Last one is on the performance guarantee for the podium. Is that something that you guys will do going forward? Do you not have a number as to what the performance guarantee is?

Not all the funds that we do, in fact most of the funds we do, don't have that feature. but in this instance there is obviously positive expectations for the future but the investor also has some downside protection but in terms of upside this is quite typical when you give some downside protection we also get more of the upside so it's a trade-off

Okay, that's all. Thank you.

Wow, quite a few more questions. Okay, maybe starting with Hsuan first, and then Brandon, and then Tuti.

Hi, thank you. Our first question is on connectivity. Can you share what are the key drivers of the revenue? The 600 over millions is quite a lot, but operating profit is only 13 million. What is the best way to forecast this segment going forward? Second question is on the segmental breakdown. I see that interest income and interest expense is quite high within corporate activities and also non-core, but it gets eliminated. Can you share how are the debts allocated between the segments? Thank you.

Maybe the first question I'll ask Man to address this.

Sure. So if you look at connectivity business, there are multiple elements to it. If you look at the subsea cable business, the revenue that operating division gets is the O&M revenue over 25 years. So that and then clearly our cost for that business increases over a period of time because as the cable gets older, it requires more maintenance. Till we sign up another new cable and then we start Propping Up the O&M Revenues. The other one is our Keppel Technology Solutions business which is extremely top line driven because it's a combination of a system integrator as well as a solution provider and to some extent even reseller of licenses. So the challenge in that business is that while we get good top lines, we have to find ways to improve our margins. And the good part is that we have started creating a plan to increase our margins significantly in that business as well. Our margins have improved more than 30% over last year, this year alone, because what we have started to do is to create centers of excellence and revenue pools in high cost countries and our distribution and delivery hubs in low cost countries. So that arbitrage helps us get higher margins in the business. So that activity has already started. We have, for example, our digital delivery centers in Vietnam and Malaysia, while our COE, Centers of Excellence for Cybersecurity, for cloud migration, AI solutions, they're also in Singapore. So, when we do this, it helps us improve our margins. So, over a period of time, you will see margins improving. Of course, it is not the same level of margins as telecom businesses, but it is a business which can grow in margins and in top line quite significantly over a period of time. Second question.

Yeah. Sanchez on... The elimination that you see is essentially that we have cross-borrowings within the group and naturally those will be eliminated out when we report the interest between the two segments.

Brandon?

Yes, just three quick questions. The first one, are you okay to share the Amont FUN? I think it was $34 billion, three years ago when you first bought it. So where we are today? That's the first one. And the second one, with regards to the China IPs in Shanghai and Beijing, Any way of working some magic around there or doing some series or are you looking to raise local funds? That's the second question. The third one is with regards to M1. The $70 million costings, how much of the EBITDA margin improvement would that imply? And also, given that it's a three-year plan, does it mean that three years are not really looking to sell it? Chris, you want to...

Okay, on Air Mons, right. On Air Mons, I think we said that the FUM is about $24 billion in the past, and if you add on the new fund rate, so that will increase it quite substantially to about close to, just below, a shade below $30 billion, yeah.

So on the IPs that we have, which includes both China and Singapore, capital South Central, we are in the process of leasing them up. I think once they are leased up, then we'll be exploring different opportunities. For China assets, I think at least for now, clearly, there are various options, as you mentioned, China REIT, etc., and also a China for China. So there are some funds that we see, insurance companies, etc., that are looking for such assets, and we'll continue to explore that. Your third question is on M1, right, on the margin.

So you want to address the margin. So the 70 million is a run rate by 28 that we are planning for. Like I think Chin Hua shared initially, we are looking at 10 million this year alone. And our, I mean, we don't share exact EBITDA numbers. but we are expecting our exit of 2027 to be significantly higher than exit of 2026 EBITDA. And then of course we have the advantage of that exit the full year of 2028. So 10 million this year fully realized and then will be 70 million by 2027. Now it's a three year plan. After three years what happens, very difficult for me to speculate but it is a business which will require a lean machine to run this business in Singapore unless Thank you for your attention.

It's kind of a playbook that we've done before when KOM was with us and we were going through that terrible period a few years before we monetized or before we spun it off. As you recall, we also did a lot of cost structuring. And essentially, if you can do that, then you end up with a better value proposition when we exit. Short answer is you know we have a plan but it doesn't mean that we have to wait until the execution of the plan. I think you can start to see the tangible benefits of that and that can factor into any potential discussion. Sorry we got Siu Kee right, next.

Just on the infra, are you still targeting for 30% when you go for EAS?

I think the DSS growth has been quite interesting. Instead of targeting 30% year-on-year growth, we want to focus on the book-to-build. We are leveraging a lot on AI to generate leads. and Generic Proposer, including that of underwriting some of the performance obligations and assets optimisation. We are seeing very interesting realised benefits of using AI. From the EBITDA margin uplift point of view. So I think the way to look at the DSS business is asset-like, is very scalable, and we have visibility of the long-term contract when executed. These are very high operating leverage business. and there's no barrier to fueling regionally as well as broader context. So the more we scale, the more operating leverage we get and I thought this is something that we are very excited about.

Thanks, just on infra also, maybe just now Kevin you have explained why is there an increase in operational role in investing for infrastructure SSCI that it's 27 million, from 7 to 27, what's that?

Distribution from, higher distribution from KIT, from one of our private funds and lower interest costs.

And then just on connectivity, what's your plan for the successive cables beyond the fifth pair? How do you cushion the potential cliff in 2027 if there's any on the capital gains from selling off the tribal pairs?

I think ultimately, what you see is that these systems, these fiber pans, the basic business model is as we build them, usually we will do it with the fund. So we will have co-investments and then over time we will take our share of the gains But more importantly, after the sale of the fiber pair, as you know, we have then secured a 25-year O&M contract. In this case, for Bifrost, the total of this five fiber pair, the contract value over the 25 years is about a billion Singapore dollars. So that's kind of the recurring income that we will see.

Don't want to lend yourselves. Do you have any more targets for such?

Well, there will be targets, but you will know that it won't be done in 2027 because the sale of the pair, it will take time, right? You have to build the pair before you can sell them.

Got it. Okay, and then last question just on the 10 million cost savings that you are focusing to optimize in M1. Can we just go through to profit and whether it has actually started in first half or can we just expect 10 million in second half? Most of it will flow through the book.

About 4 million has already been realized.

She's down into the numbers. You pass us a model, I will help you. Okay, maybe I just, sorry, yeah, Mervin, Mervin first. And then I will stop and then we'll go back to the online and then I'll come back again. Okay, Mervin, please.

In terms of the financial business, Chris mentioned that the Servo World Fund is participating or putting money into the existing funds. Are there plans to upsize your existing funds in the second half beyond the Servo World Fund at this point in time? On M1, obviously you are hoping to rely on 70 million in the next three years. In terms of restructuring costs, are you able to disclose what will be the restructuring costs in annual basis in the next three years? And for M1 itself, how is the output performance in the first half and subscribers? Are we seeing stabilization or are we still seeing a drop-off going forward? In terms of M1 potential disposal for Phoenix One for two years, what's the process here? Do we need to reach out to regulators first or are you already having discussions with potential parties?

Maybe Chris, you want to just do M1 first? I guess we are happy to take in investors as they come because fund raising has not ended yet.

So, you know, from what we are seeing that there are good interest, continuing interest in the various funds that we have, whether it's in real estate, strategies, whether it's with Ayrmont, I think there are more sign-ups coming. DC actually, we didn't include in the numbers, but yesterday there was another investor that just signed up as well. You know, so quite similar patterns that we're seeing across, whether it's our education funds and So, we will announce the good news as it comes. Thank you for your interest.

Ma, you had to deal with some of the questions.

So, two questions. One on restructuring cost. I think the 70 million that we are talking about is including restructuring cost, if at all. So, that's your first question. On ARPU and BASE, look, the market continues to be very aggressive. I don't see any uplift in the ARPU at this point in time, but we are hoping and we are seeing some early signs of things bottoming out. In fact, at M1, we are now looking to increase our BASE because of the plans and the products that we will be launching, much simplified, much easier, customer experience products that we are looking at so market continues to be very aggressive I think but there is only that much it can go down to and there is bottoming out that we do see happening now to certain extent so on the regulators I guess you know when the deal was we were not able to proceed with the deal it was quite clear at least to us

that it was not because the regulator had some issues on consolidation. So I don't see that being an issue in terms of getting regulatory approval. At the same time, I would say that when we do enter into a transaction, if we enter into a transaction, and we would want to make sure that you know it will likely go through because you know we thought that the first one will go through so this time second time around I don't think we the optionality for us to not proceed is not we have to make sure that it will go through if you understand what I'm saying Okay, let's go to some of the questions online. This is from Joe of DBS. He has a total of two questions. So first question is on recurring income is disclosed at $467 million and SSCI separately at $175 million. How much of the SSCI sits on the recurring bucket versus event-driven?

Hi Joel, the answer is 48 and it's available on slide 19. So if you look at slide 19, and that's what we said also that for SFCI we've also broken up between operational and valuation and event driven. So you will be able to identify that number on slide 19 of the deck.

Second question of your $106 billion FUM. What percentage of that is fee paying FUM?

In terms of our FUM, whenever we raise funds, we always charge fees. So I would consider that as 100%.

Next question is from Lee Sok Ling of NA in Singapore. First question, you have exceeded your FUM target ahead of schedule. What do you think is the biggest constraint to growing to 150 billion FUM over the next few years? Fundraising Demand, Availability of Investable Assets or Execution Capacity? Actually our target is 200 but I don't know why she put 150.

I think as we shared earlier there's a lot of interest from LPs. Subscribing to the funds, I think because of Kapol's operational capabilities. Like we said earlier, the digital infrastructure projects, whether it's the cable systems that we're looking at, the renewables that we're working through with Cindy's. I think these are projects which investors are very interested in, partly because of Kapol's operating capabilities. Also for our real estate, I think because of our sustainable urban renewal solutions, I think Those added created a lot of values for investors. So because of all that, I think I'm really helped by the good work of my colleagues as well in terms of our operational capabilities. So we do see that fundraising will continue to grow in interest and demand. So we are not too concerned about that. In terms of investable assets, as we said, capital not only to bilateral deals, but actually we are able to create a lot of our own deals through the help of our operational divisions. So that will actually create a pool of investable products with cash flows for investors. But nevertheless, as we said, we always tell the team we should be very rigorous in terms of our underwriting. We have to be very diligent and, you know, do maintain, you know, Good execution in terms of making sure that the numbers make the returns that our investors are looking for.

I guess maybe just to supplement what Chris has said, we do see that we have started this flywheel on the asset management side that is also supplemented by the flywheel on the operations side. so we think that the growth in FUM will grow we are at an inflection point so we think that this will continue then of course over time we will also opportunistically look at potential acquisition but it must make sense to us there must be a strategic fit I think that's all I wanted to say now there's a second question that she has which I'll answer quite quickly Because we're coming to the end, so I'll ask for maybe one more question from the floor. So her second question from Lee Sok Ling is, free cash flow improves significantly while leverage increase. How should investors think about debt over the next few years as monetization continues? So over time, as we see the monetization continues, we will expect the net debt to be brought down. I think we see monetization as a way for us to improve our leverage, also to invest in new capital, and of course lastly to reward our shareholders. So anyone for the last question?

First on share buybacks, I won't ask you whether share price is undervalued. But are there plans to up-size the share buybacks from here given the success of the new capital? Or you're saving capital for acquisitions instead?

I think the shares that we do, the share buybacks, the shares that we have bought back have been used for our internal share plan. but we have also used it when we did the Ammon acquisition so there is a second tranche coming in 2028 so we can either use cash or we can also use shares or we can issue new shares if I think there are some we're going to use our shares to so it's either we buy from the market keep it as treasury shares and then use it or we can also issue new shares So we will have to kind of factor all that in and then decide what's the best way forward. But currently we still have some dry powder from this $500 million. So I think let's focus on that first. Alright, thank you very much for your attention and spending time with us. And all great day ahead. Thank you.