Keppel shares jump on strong first-half profit rise, $500m share buyback

SINGAPORE – Keppel on July 31 said net profit rose 24.2 per cent year on year to $377.7 million for the first half of 2025, driven by “strong and steady” infrastructure and real estate earnings.

The asset manager also announced an interim cash dividend of 15 cents per share – the same as a year ago – and a $500 million share buyback programme.

The repurchased shares will be used in part for the annual vesting of employee share plans and possibly for future merger and acquisition activities.

Keppel shares rallied as much as 6.8 per cent, before closing up 3.6 per cent, or 29 cents, at $8.47 on July 31. Some 18.6 million shares changed hands.

The company introduced a new reporting metric – it dubbed “New Keppel” – which excludes non-core portfolio assets held for divestment. Under this metric, its first-half earnings rose 25 per cent year on year to $431 million.

Its earnings growth came despite a 5.2 per cent drop in revenue to $3.06 billion, which was partly due to lower sales of utilities.

Group recurring income rose by 7 per cent to $444 million, while return on equity improved to 15.4 per cent – up from 13.2 per cent a year earlier.

Keppel said its transformation under its “Vision 2030” road map, announced in 2020, continues to gather pace, focusing on four key business areas – energy and environment, urban development, connectivity and asset management.

Its funds under management expanded to $91 billion as at end-June, while asset management fees amounted to $195 million.

Private funds digital infrastructure and sustainable urban renewal have also gained strong traction with global limited partners, raising $4.7 billion year to date.

This growth was supported by capital raising efforts and continued traction in private funds focused on digital infrastructure and sustainable urban renewal, which collectively raised $4.7 billion year to date.

Keppel’s real estate business rebounded, swinging to a net profit of $98 million from a net loss of $24 million in the year-ago period.

However, its infrastructure business saw a 5 per cent dip in earnings to $346 million, due to lower asset management net profit and power business earnings.

The connectivity business also saw a decline in net profit by 19 per cent to $57 million. Keppel attributed the drop to lower earnings from telco M1, which were partly offset by its data centre investments.

Chief executive Loh Chin Hua, at a media briefing on July 31, described the results as “strong”, derived from only a part of the group’s balance sheet.

“This leaves significant value to be unlocked from releasing that part of the balance sheet that is not required by the New Keppel. By reporting the non-core portfolio separately, we aim to provide greater transparency on our performance as a global asset manager and operator.”

Mr Loh said the group’s focus is on accelerating the growth of New Keppel and monetising the $14.4 billion in non-core assets, which include $2.9 billion of embedded cash and receivables.

“This positions Keppel for a further re-rating as we unlock capital for growth, to reduce debt and to reward our shareholders.”

Further investments in renewable energy and data centres are top of mind for the group, he added, with sustainable power provision for its data centres a key priority.

Year to date, the group has announced $915 million in asset monetisation, raising its cumulative total to $7.8 billion since the programme commenced in 2020. It is also in negotiations to divest another $500 million in the second half of the year.