FY 2022 Full-Year Financial Results Webcast & Q&A Session

Mr Loh, can you elaborate on your point about Keppel’s net tangible assets rising first when the Keppel Offshore & Marine (Keppel O&M) and Sembcorp Marine transaction is approved and completed, and then falling after the Sembcorp Marine shares are distributed by Keppel Corporation to its shareholders? Does this mean that Keppel’s share price will rise and then fall?

LCH

Let me be clear, this will all take place more or less at the same time. In other words, at completion of the transaction. This is assuming that the shareholders of Sembcorp Marine approve the resolution at their Extraordinary General Meeting on 16 February. So, when the completion takes place, we will, as I mentioned in my opening remarks, make a significant gain from the transaction, which will result in our net tangible assets rising first. Of course, we are distributing 19.1 Sembcorp Marine shares1 per Keppel Corporation share. That will then result in Keppel’s net tangible assets falling. The net of it all is that the net tangible assets will be, more or less, slightly below what our net tangible assets were at end-December 2022. The key difference here is that unlike distribution from our portfolio to shareholders in specie, where there is no accompanying transaction, it would have then led to our net tangible assets falling by the value of the distribution. In this case, the value of the distribution is backed by the gain that we will make or book when the transaction is completed with Sembcorp Marine.

Congratulations on the good results in spite of the global economic headwinds. I have two questions. The final dividend is lower than last year despite an increase in the company’s recurring income. Should we view 33 cents as the minimal annual dividend by Keppel Corporation?

LCH