Keppel Ltd Delivers Robust 9M 2025 Performance: Major Divestments, Share Buyback, and Strategic Growth Signal Potential Share Price Upside

Key Highlights from Keppel Ltd’s 9M 2025 Business Update

• 25% Year-on-Year Earnings Growth for New Keppel
• Accelerated Asset Monetisation: S\$2.4 Billion Announced Year-to-Date, S\$14 Billion Since 2020
• Proposed Sale of M1’s Telco Business to Unlock S\$1 Billion Cash
• Recurring Income Growth of 15% YoY
• S\$500 Million Share Buyback Programme Progressing, S\$92.6 Million Repurchased
• Dividend Policy Tied to New Keppel Earnings and Monetisation Proceeds
• Strong Fund Management Activity: S\$6.7 Billion Private Funds Raised, Deal Pipeline at S\$35 Billion
• Major Infrastructure and Connectivity Developments
• Positive Guidance on Power Business and Data Centre Expansion

In-Depth Analysis: What Investors Need to Know

1. Earnings and Asset Monetisation Momentum

Keppel Ltd has reported over 25% earnings growth year-on-year for its “New Keppel” business, which excludes non-core and discontinued operations. Recurring income surged by nearly 15%, driven by higher asset management and operational contributions. This performance is notable given the volatile international environment and is further buoyed by a reversal of losses in the Non-Core Portfolio, leading to a 5% increase in overall net profit despite an estimated S\$222 million accounting loss from the proposed M1 telco sale.

The company’s asset monetisation programme remains a major driver, with S\$2.4 billion announced year-to-date—including the proposed sale of M1’s telco business and its stake in 800 Super. Since the programme’s launch in October 2020, total monetisation has reached S\$14 billion, with another S\$500 million targeted over the coming months. The ambition is to fully monetise the S\$14.4 billion Non-Core Portfolio by 2030, a move that continues to unlock capital for growth and shareholder returns.

2. Strategic Sale of M1’s Telco Business: Potential Price Catalyst

In August, Keppel announced the proposed sale of M1’s telco business to Simba, expected to unlock close to S\$1 billion in cash by year-end, pending regulatory approval. The transaction includes a S\$222 million accounting loss, but management is confident the deal will not be delayed by ongoing legal proceedings with Liberty Wireless. Post-divestment, Keppel will focus on transforming its ICT Services business into a growth engine, leveraging ecosystem synergies. The monetisation of M1 is a significant milestone and could materially impact the share price given the cash influx and strategic pivot.

3. Shareholder Returns: Buybacks and Dividends in Focus

Keppel has returned S\$6.6 billion to shareholders between January 2022 and September 2025 through cash and in-specie distributions. The S\$500 million Share Buyback Programme, launched at the end of July, has already seen S\$92.6 million of shares repurchased. Management remains committed to a “steady and sustainable dividend strategy” anchored to the earnings of New Keppel, with additional rewards from asset monetisation. Although no fixed payout ratio is provided, investors should expect dividends to rise in tandem with recurring earnings and asset sales, supporting a robust total shareholder return profile. Importantly, buybacks are used to fund employee share plans and possible M&A, adding a layer of flexibility in capital management.

4. Fund Management: Growth, Pipeline, and Global Expansion

Keppel’s fund management arm achieved S\$299 million in asset management fees for the first nine months, with S\$7.6 billion in acquisitions/divestments and S\$6.7 billion of new private funds raised. The deal flow pipeline stands at an impressive S\$35 billion, with more than half focused on Infrastructure and Connectivity. The listed REITs and infrastructure trust are expanding via new acquisitions, set to add S\$1.4 billion to FUM. In Europe, Aermont Capital is marketing Fund VI with a targeted first close in Q1 2026. Investors should watch for updates on fee growth as new deals close, especially in Q4 when regulatory approvals for REIT acquisitions are expected.

5. Operating Platform: Infrastructure, Power, Real Estate, and Connectivity

The Infrastructure Division reported stronger year-on-year performance, with about two-thirds of power generation capacity contracted for three years or longer, providing strong earnings visibility. The 600 MW Keppel Sakra Cogen Plant, slated for 1H 2026, is substantially contracted and should further boost recurring income. Decarbonisation and sustainability solutions (DSS) now have S\$6.8 billion in long-term contracted revenues—triple the 2022 level—with S\$11 billion in project tenders across waste, water, and Energy-as-a-Service.

Real Estate continues its pivot to asset-light solutions, having monetised S\$830 million in assets during 9M 2025. The Connectivity segment achieved “Ready for Service” status for the Bifrost Cable System and completed environmental assessment for its first Floating Data Centre, with construction aimed for Q1 2026. These developments, particularly in data centres and energy, are likely to drive future earnings and could be significant share price catalysts.

6. Power Business and Market Trends

Keppel’s integrated power business remains resilient despite normalising spark spreads. Over 67% of customers are contracted for three years or more, shielding earnings from market volatility. The upcoming expansion of capacity by nearly 50% by 2026 and government plans for a 700 MW data centre park on Jurong Island suggest strong future demand, which could offset any downward pressure on spreads. Investors should monitor power spreads, capacity additions, and related regulatory developments.

7. Forward-Looking Statements and Potential Catalysts

• Completion of M1 sale and S\$1 billion cash unlock by year-end.
• Progress on the S\$500 million asset monetisation pipeline in the coming months.
• Potential premium realised from additional fibre pairs on the Bifrost Cable System.
• Expansion and contracting in the power business amid evolving Singapore energy policy.
• Ongoing evaluation of new cable systems and global energy platform acquisitions.
• Share buyback pace and dividends, with Board discretion on payout ratios and monetisation proceeds.

Investor Takeaways: Why This Update Matters

Keppel Ltd’s 9M 2025 Business Update is packed with price-sensitive information and strategic moves that could drive share price performance. The successful monetisation programme, sale of M1, strong recurring earnings, and active capital returns all point to a company executing on its transformation to a global asset manager and operator. With a deal pipeline of S\$35 billion, major infrastructure investments, and a commitment to growing dividends, Keppel remains one of the most dynamic investment stories in Singapore’s blue-chip space.

Investors should closely monitor the completion of the M1 sale, ongoing asset monetisation, new project launches, and updates on fund management activity—all of which can materially affect Keppel’s valuation and share price trajectory in the months ahead.

Disclaimer

This article is based on publicly available information and the 9M 2025 Keppel Ltd Business Update. It is not investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. Keppel Ltd’s share price and future dividends are subject to market risks and Board discretion. All forward-looking statements are subject to change based on company performance and market conditions.

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