Keppel Ltd Posts Strong 9M 2025 Earnings, Announces Major Asset Monetisations and Enhanced Shareholder Rewards

Key Financial Highlights

• Net Profit Surge: The “New Keppel” (excluding Non-Core Portfolio and discontinued M1 telco business) reported a remarkable net profit increase of over 25% year-on-year (yoy) for the first nine months of 2025, driven by growth across all three operating segments: Infrastructure, Real Estate, and Connectivity.
• Recurring Income Growth: Recurring income climbed nearly 15% yoy, supported by higher contributions from both asset management and operating activities.
• Overall Net Profit: Including discontinued operations (M1 telco business), Keppel’s overall net profit still rose by over 5% yoy, demonstrating resilience even after accounting for the loss from the proposed M1 divestment.
• Private Funds and Asset Management: Private funds raised a combined Funds Under Management (FUM) of S\$6.7 billion in the period, with asset management fees remaining steady at S\$299 million. Listed REITs and infrastructure trusts are expected to add another S\$1.4 billion to FUM with recent acquisitions.

Major Asset Monetisation Programme

• Asset Monetisations: Keppel announced about S\$2.4 billion in asset monetisations for 9M 2025, including S\$1.3 billion from the proposed divestment of M1’s telco business and the sale of Keppel’s interests in 800 Super.
• Historic Progress: Since the launch of its asset monetisation programme in October 2020, Keppel has announced approximately S\$14 billion in total monetisations, covering a broad range of assets such as Keppel Offshore & Marine (divested in 2023) and now M1 Telco.
• Further Monetisation Pipeline: The company is targeting more than S\$500 million in additional deals in the coming months, underscoring ongoing efforts to unlock value.
• Share Buyback Programme: Since initiating a S\$500 million Share Buyback Programme in July 2025, Keppel has repurchased S\$92.6 million worth of shares by end-September 2025.
• Shareholder Returns: From January 2022 to September 2025, Keppel returned S\$6.6 billion to shareholders through cash and in-specie distributions, achieving an impressive annualised Total Shareholder Return (TSR) of 38%, far surpassing the Straits Times Index’s 14.5%.

Strategic Update: Dividend Policy and Asset Monetisation Benefits

• Dividend Policy Change: Keppel will now base dividend payouts on the annual net profit of the “New Keppel.” Importantly, a portion of cash unlocked from asset monetisations will also be used to reward shareholders, indicating potential for special dividends or enhanced payouts.
• Focus on Stability: As recurring income grows, Keppel aims to provide consistent and steadily increasing cash returns while maintaining prudent capital allocation for growth. The final dividend amount remains at the Board’s discretion.

Operating Division Highlights: Infrastructure, Real Estate, Connectivity

• Infrastructure: Strong year-on-year performance, with 67% of contracted power generation capacity locked in for three years or longer, ensuring earnings visibility. The 600 MW Keppel Sakra Cogen Plant will begin operations in 1H 2026 and is already substantially contracted. Keppel is leading a consortium for a major ammonia power generation project on Jurong Island.
• Decarbonisation and Sustainability Solutions (DSS): DSS segment grew rapidly, with long-term contracted revenues reaching S\$6.8 billion—a 2.1-fold increase since 2022. The tender pipeline for waste, water, and EaaS projects stands at about S\$11 billion.
• Real Estate: Continued shift to asset-light solutions, with S\$830 million of real estate assets monetised in 9M 2025. Sustainable Urban Renewal solutions are being implemented across four projects with a combined asset value of S\$1.3 billion.
• Connectivity: Bifrost Cable System achieved Ready for Service status on 1 October 2025, aiming for commercial traffic in 4Q 2025. The Floating Data Centre project is awaiting construction permit and is scheduled for completion in 2028. Importantly, the proposed sale of M1’s telco business to Simba Telecom could unlock close to S\$1 billion in cash for Keppel, with completion targeted by end-2025. Keppel will retain M1’s ICT Services business and intends to transform it into a new growth engine.

Price Sensitive News and Shareholder Watch Points

• Significant Asset Monetisations: The divestment of M1’s telco business and other large asset sales will free up substantial cash, which Keppel intends to partly return to shareholders—potentially driving share price appreciation.
• Dividend Enhancement: The explicit link between dividend payout and asset monetisation proceeds signals possible special dividends or higher regular dividends, reinforcing Keppel’s commitment to rewarding shareholders.
• Share Buybacks: The ongoing buyback programme may further support share price.
• Growth Pipeline: With S\$35 billion in deal-flow pipeline and strong growth in recurring income, Keppel is positioning itself for continued upside.
• Legal Proceedings: Keppel does not expect ongoing legal proceedings related to Liberty Wireless to hinder the sale of M1’s telco business, reducing deal risk and uncertainty.

CEO Statement

Mr Loh Chin Hua, CEO of Keppel, emphasised the company’s strong momentum, highlighting over 25% earnings growth yoy for “New Keppel,” a reversal of losses for the Non-Core Portfolio, and a resilient overall net profit despite accounting losses from M1 Telco’s sale. He believes the market is re-rating Keppel as a global asset manager and operator and reaffirmed the focus on growth and total shareholder returns.

Conclusion: Potential Share Price Catalysts

Keppel’s robust earnings, aggressive asset monetisation, dividend policy overhaul, and buyback programme present significant catalysts for share price appreciation. Investors should closely watch upcoming monetisation deals, dividend announcements, and progress on strategic projects like the Bifrost Cable System and Floating Data Centre, as these developments could unlock further value.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional financial advisers before making any investment decisions. The information is based on publicly available data as of the date of publication and may be subject to change.

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