Keppel's Q1 earnings growth greatly underpinned by divestments

But this cannot go on forever, analysts say.

Keppel Corporation's 24% increase in net profit to $260m was driven primarily by divestment gains, a report by UOB Kayhian said.

For instance, its property earnings were partly prevented from sinking further with the $29m gains recorded from the divestment of its 80% stake in a Surabaya company.

Meanwhile, the divestment of stake in GE Keppel Energy Services which is estimated at $4.5m contributed to the 129% growth in infrastructure net profit.

Keppel's Investment arm was also helped by divestments, reversing from a loss of $4m to a profit of $125. The segment was helped by $112m in likely one-off divestment gains and reversal of impairments.

"We note that divestment gains have supported Keppel’s earnings to a very large extent in 1Q17. A read through points to the need to recycle assets and free up cashflow to meet the shortfall from O&M. This cannot go on forever. Should the O&M division continue to burn cash and the downturn remain protracted (we think it will until 2020 at least), the division being viewed as non-core could be possible," UOB noted.