Keppel reports stronger net profits in Q1; expects limited direct tariff impact
[SINGAPORE] Keppel reported on Thursday (Apr 24) a strong Q1 performance for 2025, with net profit rising more than 25 per cent year-on-year.
These profits, compared to Q1 in 2024, exclude legacy offshore and marine assets such as shares of Seatrium and legacy rigs that the company divested in 2024. Including these assets, profit would more than double due to reduced losses from the legacy portfolio.
Recurring income accounted for over 80 per cent of net profit in the quarter. It was driven by stable results in the infrastructure segment, improved contributions from real estate and stronger asset management returns, the company said.
Keppel also reported asset monetisations of S$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 S$550 million in divestments to be finalised in upcoming months.
Asset management fees increased by 9 per cent year-on-year to S$96 million, the company reported, rising from S$88 million in Q1 of 2024. It raised S$1.6 billion in equity during the quarter – 3.5 times higher than the same period last year – and secured S$2 billion in capital commitments for new private funds, representing about S$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 S$6.3 billion. It also reported commissioning readiness in its Sakra Cogen Plant and that it had seeded a 36 per cent stake of its Merlimau Cogen Plant to Keppel Core Infrastructure Fund.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
In its connectivity business segment, Keppel reported progress on the Bifrost subsea cable, reaching 92 per cent completion as of March. The cable system is expected to be operational in H2 2025. The company also expects the joint investment in subsea cable solutions provider Global Marine Group by Keppel Infrastructure Trust to enhance its connectivity business.
Facing tariff volatility, the company remained cautiously optimistic.
Loh Chin Hua, Keppel's chief executive 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, 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.
Shares of Keppel were trading S$0.14 higher or 2.2 per cent to S$6.54 on Thursday at 10 am.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
15 hours ago
- Straits Times
Keppel divests $80 million of assets as part of multi-billion dollar monetisation programme
The transactions are in line with Keppel's $10 billion to $12 billion monetisation target by end-2026. ST PHOTO: BRIAN TEO SINGAPORE - Asset manager Keppel is divesting its stakes in a New-York based company and a logistics park in China to unlock more than $80 million from the monetisation of non-core assets, the group said on June 6. This is in line with its $10 billion to $12 billion monetisation target by end-2026. It follows the group's establishment of a task force, set up earlier this year, to optimise the speed of divestments of non-core assets – the Accelerating Monetisation Task Force (AMTF). Keppel has divested its 20.5 per cent stake in Computer Generated Solutions, a company that provides business process outsourcing, enterprise resource planning software and e-learning services. It is also disposing its 75.8 per cent stake in the Wanjiang Logistics Park, an integrated agricultural logistics park located in the Lu'an city of China's Anhui province. The divestment is set to complete in the second half of 2025. While both assets were on Keppel's balance sheet for years with 'limited exit options', the AMTF reviewed them and came up with fresh divestment perspectives that allow the group to realise more than $80 million in value from their disposals, said Mr Lee Kok Chew, head of Keppel's AMTF. Since embarking on its $17.5 billion asset monetisation programme in October 2020, Keppel has announced over $7.3 billion in monetisation to date, the group said. These include the latest two divestments. The asset manager is currently in advanced stages of negotiating another $550 million of real estate transactions. 'The monetisation of non-core assets, together with Keppel's growing recurring income, will put the company in a good position to continue rewarding shareholders well, whether through dividends, distributions in-specie or share buybacks,' the group said. The divestments are not expected to have material impact on Keppel's net tangible asset per share or earnings per share for the current fiscal year. Shares of Keppel ended on June 5 2 per cent or $0.14 higher at $6.97, before the news. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
CNA
2 days ago
- CNA
Two Jurong hospitals to explore integration with district cooling system
SINGAPORE: Two hospitals in Jurong could become the first in Singapore's healthcare sector to use a district cooling system for air conditioning, following the signing of an agreement with asset operator Keppel on Thursday (Jun 5). Under the Memorandum of Understanding (MOU), Ng Teng Fong General Hospital and Jurong Community Hospital – part of the JurongHealth Campus – will explore the feasibility of integrating with Keppel's district cooling system. The system will complement and further optimise their existing efficiency measures, potentially yielding financial savings and reducing their carbon footprint, both hospitals said in a press release. The hospitals currently rely primarily on a centralised chilled water supply for an array of needs, which include round-the-clock cooling for operating theatres, intensive care units and medical equipment. Healthcare institutions also need standby chillers in case of disruptions. ENERGY-EFFICIENT OPTION To optimise energy use, the district cooling system uses technologies such as thermal energy storage and intelligent control, the hospitals said. The system can also provide more reliable and consistent cooling, minimising the risk of disruptions to operations and improving patient comfort. Unlike conventional cooling systems, where each building has its own chiller, the district cooling system plant generates chilled water and distributes it through underground pipes to a network of buildings for air conditioning. At Ng Teng Fong General Hospital and Jurong Community Hospital, the chilled water will be distributed to critical cooling zones such as laboratories and intensive care units. Heat exchangers will transfer the chilled water to their internal air handling units, then return warm water to Keppel's plant for re-chilling, re-cooling and reuse. Besides the hospitals, Keppel's district cooling system will serve future developments in Jurong Lake District, including offices, business parks and residences. As different types of buildings use the cooling system at different times of the day, the demand for cooling is spread out, reducing peak demand and increasing energy efficiency. The Urban Redevelopment Authority (URA) awarded Keppel the contract to develop the district cooling plan there in June 2023. Keppel has estimated the contract will generate approximately S$950 million (US$738 million) for the company over 30 years, according to the release. The plant has a capacity of about 29,000 refrigeration tonnes (RT), roughly equivalent to the cooling capacity of around 19,000 1.5-tonne household air conditioning units. It will provide chilled water and cooling services to an estimated 1.4 million sq m of gross floor area, or close to 200 football fields. Ms Cindy Lim, CEO of Keppel's infrastructure division, said the district cooling system is expected to lead to a further 2 per cent optimisation in energy efficiency. "With these energy savings and cost optimisation, a total life cycle cost savings of more than S$7 million over 30 years are expected," she added. Associate Professor Dan Yock Young, the CEO of both hospitals, said that healthcare services consume "significant amounts of energy and water" and generate medical waste. "As one of the key contributors to the climate crisis, it is imperative for us to look into optimising energy efficiency," he said. He added that the district cooling plant could reduce the need to replace and maintain chillers. This could, in turn, free up some of the hospital's rooftop and plant room space, which are occupied by cooling towers and standby chillers, for other meaningful activities such as patient care and therapy. Chief sustainability officer of both hospitals, Mr Ng Kian Swan, called the MOU a 'leap forward' as both institutions 'explore ways to save the planet'. 'The collaboration could set a new benchmark in the healthcare sector,' he said.
Straits Times
4 days ago
- Straits Times
Singapore shares fall after Trump vows to double steel tariffs; STI down 0.1%
Across the broader market, decliners outnumbered advancers 297 to 197, after 1.2 billion securities worth $1.3 billion were traded. ST PHOTO: BRIAN TEO Singapore shares fall after Trump vows to double steel tariffs; STI down 0.1% SINGAPORE – Shares on the Singapore bourse ended lower on June 2, after US President Donald Trump said last week that he would double tariffs on steel and aluminium to 50 per cent to 'even further secure' the US steel industry. The benchmark Straits Times Index (STI) fell 0.1 per cent or 4.02 points to 3,890.59 points. Across the broader market, decliners outnumbered advancers 297 to 197, after 1.2 billion securities worth $1.3 billion were traded. The top gainer on the benchmark index was property developer Hongkong Land, which rose 2.3 per cent or US$0.12 to US$5.29. The biggest decliner was offshore and marine specialist Seatrium. The counter fell 2.4 per cent or $0.05 to $2. Local telco Singtel was the most actively traded counter by volume, with 32.2 million units worth $122.1 million traded. The counter fell 0.3 per cent or $0.01 to $3.80 on a cum dividend basis. Regional bourses were also in the red on June 2 in the wake of Mr Trump's announcement, which will take effect on June 4. Japan's Nikkei 225 slid 1.3 per cent, and Hong Kong's Hang Seng Index fell 0.6 per cent. Australia's ASX 200 was down 0.2 per cent. Mr Vishnu Varathan, head of macro research for Asia (excluding Japan) at Mizuho Securities, said that Canada, Mexico and Brazil will be among the countries hurt the most by the tariffs due to their exposure to the US market. In Asia, Thailand, South Korea and India are the most exposed, followed by Australia. However, Mr Varathan said that the US 'will not be unscathed' by the tariffs either, given that onshore steel and aluminium is more expensive and will raise costs for businesses. 'Ultimately this will prove to be an act of self-harm, hurting the competitiveness of downstream US industries,' he added. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
