The special dividend comprises 2 cents per share in cash and one unit of Keppel REIT for every nine Keppel shares held. The Keppel REIT unit translates to a special dividend of around 11 cents per Keppel share, based on the Feb 3 closing price of 98 cents. Altogether, the total FY2025 payout will be 47 cents per Keppel share, up 38% y-o-y.
Interestingly, the sale of M1 for around $1.3 billion is not part of the $1.6 billion completed monetisation, as the deal announced in August 2025 is pending approvals. If completed, the gains will be booked in FY2026. Around $300 million in divestments announced last year were also not completed by FY2025. This would add to the $1.3 billion and provide a special dividend of nearly nine cents per share.
Since FY2025’s special dividend included a dividend-in-specie of Keppel REIT, Loh Chin Hua, group CEO of Keppel, fielded questions about whether there were plans to give Keppel shareholders more dividend-in-specie from its REITs and infrastructure trust. Keppel is the sponsor and major unitholder of Keppel REIT, Keppel DC REIT and Keppel Infrastructure Trust.
What portion of the monetisation proceeds is earmarked for special dividends? Loh says that when Keppel monetises the non-core portfolio, it goes into three things. One is, of course, to reduce debt. And secondly, of course, is to fund growth in the New Keppel, he says.
See also: Singtel straps on more engines for growth beyond 2028
“Last but not least, is to return capital to shareholders. We will have to consider all these factors before deciding what percentage to return, whether it’s part cash and part dividend-in-specie. That will be decided then, but there are no current plans to do anything additional in dividend-in-specie, whether it is Keppel REIT or any of our REITs and trusts,” Loh says.
Since October 2020, under the 2025 monetisation deals, $14.5 billion has been monetised. This includes the $4.7 billion Keppel O&M divestment in 2023, comprising Sembcorp Marine (now Seatrium) shares distributed at $2.30 per share and a $0.5 billion cash component.
Looking ahead, Keppel has a further $13.5 billion to monetise between now and 2030.
See also: OUE REIT gets higher target prices with lower financing costs and operational growth
Among the non-core assets to be monetised is AssetCo, holding the legacy Keppel rigs, carried at around $3.5 billion.
Loh notes that jack-up rig day rates have been trending up in the last few months. Of Keppel’s six rigs that are now working, four or five of them are being re-contracted at rates that are about eight to 10% higher than what they were. “These are bareboat charter rates, so we are quite encouraged by that,” he says.
“On the floaters, the market is still a bit soft, but we expect that to improve towards the end of the second half of this year. Looking at the offshore rate market, we believe that, with no new supply coming on and older rigs becoming obsolete over time, the rig supply will tighten. We are sanguine about the medium- to long-term outlook for rig prices. Whilst we are waiting for the capital markets to improve, we will put the rigs to work,” Loh elaborates.
The New Keppel reported a net profit of $1.1 billion, up 39% y-o-y, underpinned by improvements across all business segments and record earnings from the infrastructure division. Its funds under management (FUM) were up 7.9% y-o-y to $95 billion. Keppel has a target of $100 billion in AUM by the end of 2026, which is likely to be breached. Asset management profit increased 15% to $189 million in FY2025.
Including the non-core portfolio for divestment and discontinued operations, Keppel delivered an overall net profit of $789 million in FY2025, compared with $940 million for FY2024, mainly due to the accounting loss of $222 million arising from the proposed sale of M1’s telco business.
In a research note, UOB KayHian says: “A messy set of results with many moving parts due to the company’s significant amount of capital recycling that was done last year. We continue to like the stock because of its track record of successful execution of its plans, the new incoming chairman who will likely be more active within the company, and continued growth in AUM and recurring income.”
Keppel closed at $10.95 on Feb 3, with its ordinary dividend translating into a yield of 3.1% and its special dividend of 47 cents translating into a yield of 4.3%.
