Keppel Infrastructure Trust Unveils Strategic Moves: Major Divestments, Digital Expansion, and Strong 1H 2025 Results Signal Value Creation Ahead

Key Takeaways for Investors

• Strategic Capital Recycling: KIT completed two major divestments, unlocking S\$301 million for redeployment into higher-yielding assets.
• Digital Infrastructure Expansion: Proposed acquisition of a 46.7% stake in Global Marine Group (GMG), a subsea cable service provider, marking KIT’s entry into the high-growth digital infrastructure space.
• Strong Financial Performance: 1H 2025 distributable income surged 31.2% YoY to S\$119.4 million, with DPU up 1% YoY to 1.97 cents, driven by reinforced cash flow from key businesses and asset recycling.
• Portfolio Growth and Resilience: AUM reached S\$8.7 billion, with global diversification across energy transition, environmental services, and distribution & storage segments.
• Balance Sheet Strength: Net gearing improved to 39.3%, with healthy debt metrics and flexibility for future acquisitions.
• ESG Leadership: KIT continues to advance sustainability, diversity, and governance initiatives, including a net zero target by 2050.

Strategic Capital Recycling: Unlocking Value and Flexibility

In a move poised to impact KIT’s future earnings and strategic direction, the Trust announced the completion of two critical divestments:

• Partial Divestment of Ventura: KIT sold a 24.62% stake to private investment funds managed by Samsung Asset Management for S\$109 million. This transaction demonstrates KIT’s ability to realise upside in Ventura’s value and signals market confidence in the asset.
• Full Divestment of Philippine Coastal: KIT exited its entire 50% stake to I Squared Capital affiliates for US\$148 million (S\$192 million). The divestment strengthens the Trust’s balance sheet and allows redeployment into more strategic sectors, aligning KIT with lower carbon energy transition goals.

The combined proceeds of S\$301 million enhance KIT’s financial agility and are earmarked for yield-accretive opportunities, such as the proposed GMG acquisition. The ability to recycle capital and maintain a robust pipeline of potential investments is a key differentiator for KIT, supporting long-term distributable income growth.

Digital Infrastructure Expansion: Proposed Strategic Stake in Global Marine Group

In a potentially price-moving announcement, KIT revealed its intention to acquire a c.46.7% stake in Global Marine Group (GMG), a leading UK-based subsea cable installation and maintenance provider, for US\$90.6 million (S\$122.3 million). GMG controls 31% of the global maintained cable length, with 80% of FY2024 revenue backed by long-term contracts.

• Highly Predictable Cash Flows: GMG’s business is underpinned by multi-year charter and maintenance agreements, offering strong visibility and stability.
• Yield Accretion: The transaction is forecasted to boost Funds from Operations (FFO) by 1.3% and DPU by 3.5% post-acquisition, assuming full distribution to unitholders.
• Strategic Sector Entry: This marks KIT’s entry into digital infrastructure, a sector experiencing secular growth amid global digitalisation and data demand.
• Unitholder Approval Required: As an Interested Person Transaction, unitholders must approve the deal, which could be a price-sensitive event depending on market sentiment.

1H 2025 Financial Results: Resilient Growth and Enhanced Cash Flow

KIT delivered a strong 1H 2025, with distributable income rising 31.2% YoY to S\$119.4 million. Key contributors included:

• City Energy: Higher town gas volume, service income, and cost recovery drove a 43.4% increase in funds from operations.
• Ixom: Stable performance from chemical manufacturing and distribution, with growth in the Bitumen segment offsetting weaker AUD.
• Ventura: Full contribution in 1H 2025 boosted segment FFO, with market-leading reliability and contract extensions supporting future performance.
• Balance Sheet: Net debt improved from S\$2.53 billion to S\$2.38 billion, and interest coverage ratio increased to 11.9x, reflecting prudent capital management.

AUM growth was driven by new acquisitions and organic business expansion, with the portfolio now spanning mature economies and essential infrastructure assets.

Portfolio Optimisation and Value Creation

KIT continues to actively manage and optimise its portfolio, focusing on:

• Sharpening business focus and pursuing bolt-on acquisitions
• Exploring synergies and reinvesting divestment proceeds into higher-yielding assets
• Executing asset recycling for long-term cash flow resilience
• Leveraging sponsor Keppel’s proprietary assets for future growth

Recent asset sales and acquisitions have resulted in significant EBITDA growth across key businesses, with Ixom, City Energy, and Ventura all posting double-digit gains post-acquisition and optimisation.

ESG, Governance, and Sustainability

KIT remains a sector leader in ESG, with a net zero target by 2050, a dedicated Board ESG Committee, and 37.5% female Board representation. The Trust achieved an ‘A’ rating in the MSCI ESG Ratings and reported zero incidences of non-compliance or corruption. Over 1,100 hours of community service and 23 hours of training per employee in 2024 demonstrate a strong commitment to responsible business practices.

Conclusion: Implications for Shareholders and Potential Catalysts

Keppel Infrastructure Trust’s latest moves are potentially price-sensitive and could impact share value due to:

• Significant capital recycling and divestment proceeds supporting future growth
• Entry into high-growth digital infrastructure via GMG, subject to unitholder approval
• Robust financial results and enhanced balance sheet strength
• Ongoing portfolio optimisation and value accretion
• ESG leadership positioning KIT as a preferred investment in sustainable infrastructure

Investors should closely monitor upcoming unitholder meetings and announcements regarding the GMG acquisition, as well as future deployment of capital into new infrastructure sectors. KIT’s proactive strategy and financial agility position it well for continued growth and resilience in an evolving global infrastructure landscape.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions. The information herein is based on public disclosures and management commentary as at October 2025; future performance may differ materially due to market conditions or corporate actions.

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