Keppel Q1 profit up over 25%; firm expects limited direct impact from US tariffs

SINGAPORE - Keppel’s net profit rose more than 25 per cent for the first quarter ended March, driven by improvements in its real estate and asset management arms.

The earnings exclude legacy offshore and marine assets such as shares of Seatrium and legacy rigs remaining from the company’s divestment of its offshore and marine business in 2024. Including these assets, profit would more than double due to reduced losses from the legacy portfolio.

The news sent Keppel shares surging as much as 4.3 per cent to $6.68, before they closed up 3 per cent at $6.59 on April 24.

Looking ahead at the impact from US tariffs, Keppel was cautiously optimistic.

Its chief executive Loh Chin Hua said: “The direct impact of the US tariffs on Keppel is expected to be limited, as Keppel is not engaged in the manufacturing or export sectors.”

“However, a trade war would be highly detrimental to the international economy, and could affect us indirectly through higher supply chain costs, reduced market confidence, exchange rate risks and the pace of asset monetisation,” he cautioned.

Still, the company’s stronger recurring income would enhance its ability to navigate volatility, Mr Loh said.

He also noted that the company is involved in meeting demand for alternative real assets that are supported by macrotrends, including energy transition, digitalisation and artificial intelligence.

For the first quarter, recurring income accounted for over 80 per cent of net profit. It was driven by stable results in the infrastructure segment, improved contributions from real estate and stronger asset management returns.

Keppel also reported asset monetisations of $347 million to date in 2025, mostly from divestments of real estate assets in China and Vietnam. The company said it is also in advanced negotiations for an additional $550 million in divestments to be finalised in upcoming months.

Asset management fees increased by 9 per cent year on year from $88 million to $96 million. It raised $1.6 billion in equity during the quarter – 3.5 times higher than the same period in 2024 – and secured $2 billion in capital commitments for new private funds, representing about $4.9 billion in projected funds under management.

In its infrastructure segment, the company reported steady earnings, including growth in long-term contract revenue by 31 per cent year on year, reaching $6.3 billion. It also reported commissioning readiness in its Keppel Sakra Cogen Plant and that it had seeded a 36 per cent stake of its Keppel Merlimau Cogen Plant to Keppel Core Infrastructure Fund.

In its connectivity business segment, Keppel reported progress on the Bifrost subsea cable, reaching 92 per cent completion as at March. The cable system is expected to be operational in the second half of 2025. It also expects the joint investment in subsea cable solutions provider Global Marine Group by Keppel Infrastructure Trust and Keppel Infrastructure Fund to enhance its connectivity business and digital infrastructure strategy.

In an earnings call on April 24, Mr Loh said Keppel is in a “comfortable” position with its liquidity and gearing, but remains “extra watchful” in the current environment.

“We believe that as we pivot more into an asset-light model, our growth is being funded through the FUM (funds under management) that we raise, and there’s less requirement on our balance sheet when we do acquisitions,” he said.

“I think that positions us very well, particularly as we go through what could be a more tricky patch ahead,” he added.

As for the legacy offshore and marine assets, Keppel is looking at how it can put more rigs to work, amid the drop in oil prices in recent months.

Making the rigs generate cash flow would “reduce the drag” on Keppel’s balance sheet and prepare them for potential monetisation, Mr Loh noted.

“While it is a difficult market on the offshore side, we are still receiving inquiries – (not only) for potential monetisation, but also more and more on potential… charters,” he said. THE BUSINESS TIMES