Keppel Ltd. FY2025 Financial Results: Key Highlights & Investor Insights

Executive Summary

Keppel Ltd. announced its FY2025 financial results, showcasing robust performance across its core segments. The management addressed several price-sensitive issues during the webcast, including asset monetisation, special dividend policies, updates on major asset divestments, strategic plans for growth, and leadership changes. The following article synthesizes the main points and implications for shareholders and investors.

Key Points from the FY2025 Results

• Leadership Change:
  
  Mr Danny Teoh will retire as Chairman after the AGM on 17 April 2026. Mr Piyush Gupta, currently an Independent Director, will be appointed as non-executive Chairman. Piyush Gupta’s leadership is expected to accelerate Keppel’s transformation and strategy execution.
• Special Dividend Policy & Asset Monetisation:
  
  Keppel will pay out 10-15% of gross value of completed asset monetisations as special dividends. For FY2025, the payout is based on S\$1.6 billion completed deals. Importantly, only completed transactions in the financial year are considered, not those merely announced. This is a price-sensitive detail for dividend modeling.
• Share Buybacks:
  
  The company has expended S\$116 million on share buybacks, with more to go. Buybacks are managed carefully, serving to fund share plans and as currency for M&A. Share buybacks cease during blackout periods or when in possession of price-sensitive information.
• Infrastructure Segment Performance:
  
  Keppel’s integrated power business delivered resilient results despite softening spark spreads. 67% of power capacity is contracted for three years or more, reducing earnings volatility. The Keppel Sakra Cogen Plant will be fully commissioned in 1H 2026, with capacity contracted for 2026 and 2027. Decarbonisation and sustainability solutions have a strong book-to-bill ratio (3.6x) and a S\$7.1 billion backlog, providing resilient EBITDA over 10-15 years.
• Asset Monetisation Pipeline:
  
  Keppel aims to substantially monetise its S\$13.5 billion Non-Core Portfolio by 2030. Asset monetisation pace remains lumpy, with S\$1.6 billion completed in FY2025. The company is prioritizing fair value in divestments, not fire sales.
• Divestment and Treatment of M1:
  
  The divestment of M1 has not yet been completed pending regulatory approval, although the loss has been booked in FY2025 as a discontinued operation. Once completed, M1 will be included in the asset monetisation tally for FY2026.
• Real Estate Segment:
  
  Some fair value losses were booked, particularly in China assets. However, operating income in Real Estate turned positive, marking a turnaround. The US senior living business acquired in March 2025 is contributing positively.
• Keppel South Central Monetisation:
  
  The asset is about 50% committed or in active negotiations for leasing. Management is prioritising rent levels to optimize exit price, rather than sacrificing rent for occupancy.
• Legacy Rigs:
  
  Six rigs are working, with four recontracted at 8-10% higher rates. Floaters market is soft but expected to improve in 2H 2026. Keppel is exploring all options, including bareboat charters and outright sales.
• Data Centres and Powerbanking:
  
  Keppel announced a 123-hectare powerbank in Melbourne, capable of supporting 720MW of data centre power. This brings total powerbank capacity to about 1GW, enabling shovel-ready deployment for hyperscalers. Both brown and green power sources are available, catering to ESG requirements.
• Fund Management:
  
  Keppel is confident of surpassing its S\$100 billion FUM target by 2026, driven by strong investor demand for real assets in Europe and Asia, and alternative assets with robust cash flows.
• AI & Digital Strategy:
  
  Keppel is adopting an “AI-first mindset” across fund management, investment, and operations, leveraging AI for site selection and operational efficiency in data centres and powerbanking.
• Business Trusts & REITs:
  
  No current plans to launch new Business Trusts or REITs. Focus remains on scaling existing REITs and Trusts for margin and profit growth.
• GasCo Impact:
  
  The establishment of GasCo in Singapore is expected to instill discipline in gas procurement, prevent oversupply, and stabilize the market, benefiting Keppel’s power business.
• Debt Reduction & Capital Allocation:
  
  Asset monetisation proceeds are earmarked for debt reduction, growth investment in New Keppel, and capital returns to shareholders.
• Succession Planning:
  
  CEO Loh Chin Hua reiterated ongoing succession planning for executive roles, indicating continuity and stability in management.

Investor Implications & Potential Price-Sensitive Issues

• Special dividend payouts are strictly tied to completed asset monetisations, not merely announced deals. Shareholders should closely monitor actual completions, especially large divestments like M1.
• Keppel’s disciplined approach to asset monetisation (not a fire sale) may support asset values and share price, but could slow the pace of capital returns if deals are delayed.
• Leadership change to Piyush Gupta, known for strategic acumen, could be viewed positively by the market, especially in accelerating transformation and fundraising.
• Strong contracted power capacity and resilient earnings in Infrastructure, combined with rapid growth in decarbonisation and sustainability solutions, are positive for future cash flows and valuations.
• Ongoing adoption of AI in operations and fund management is likely to improve operational efficiency and competitiveness, a potential positive for investors.
• Potential monetisation of Keppel Sakra Cogen Plant, Keppel South Central, and legacy rigs could result in significant capital returns and/or asset value gains.
• Progress in fund management, particularly surpassing S\$100 billion FUM, is a key driver of future earnings.
• Any delays or issues in asset divestments, especially M1 and legacy rigs, could impact special dividend payouts and share price sentiment.
• Market outlook for power spreads, especially given new capacity and GasCo’s impact, remains a risk factor for Infrastructure earnings.

Conclusion

Keppel Ltd. continues its strategic transformation, focusing on asset monetisation, growth in fund management, resilient Infrastructure earnings, and disciplined capital management. The leadership change, special dividend policy, and progress on key asset divestments are all price-sensitive matters shareholders must watch closely. The company’s adoption of AI and expansion in data centre powerbanking position it well for future growth.

Investors should note the lumpiness in asset monetisation and the company’s commitment to achieving fair value, which may affect the timing and quantum of capital returns. The focus on contracted earnings, operational efficiency, and new business initiatives further support the company’s long-term outlook.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult professional advisors before making investment decisions. All monetary values stated are in Singapore dollars unless otherwise indicated.

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