In the first quarter, Keppel added $400 million of funds under management (FUM), with another $2 billion of limited partner (LP) commitments across private funds to be finalised in the next few months. Year-to-date Keppel has announced $385 million of asset monetisation and completed $34 million of monetisations.
As at April 1, Keppel has sold its entire 5% stake in Seatrium, realising a total value of $430 million in cash, based on a weighted average price of $2.52 per share and $1 million in dividends received from Seatrium in 2025. Some of the Seatrium sale is recognised in the $347 million monetised in the first quarter. Keppel is actively pursuing $2 billion to $3 billion of monetisation this year.
Operationally, infrastructure is Keppel’s largest segment, contributing more than 70% to net profit in FY2025. In the briefing, questions focused on the spark spread and how Keppel is likely to manage its sources of gas for its power generators.
Cindy Lim, CEO of Infrastructure at Keppel, said a large part of Keppel’s supply is either fuel-hedged or fuel-indexed so that a significant portion of any increase can be passed on to the downstream power purchasers. She adds that pre-Iran War, spark spreads had fallen by $10, but since the start of the war, spark spreads have risen by up to $30 for its shorter 1–3 year contracts. Some of Keppel’s gas contracts are priced based on Japan Korea Marker (JKM), the benchmark for LNG cargoes delivered to North Asia and considered the cornerstone for LNG spot trading. Going forward, the replacement gas is benchmarked to Brent.
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The Iran War is proving to be beneficial for Keppel’s $4 billion of legacy assets comprising jack-up rigs and floaters. The war has driven up the price of Brent to more than US$100 ($128) per barrel compared to below US$70 per barrel before the war. The legacy rigs are sitting in AssetCo (structured as a fund), group CEO Loh Chin Hua says. “We are seeing good momentum. We are now focusing on getting the unfinished rigs ready for work for some longer-term charter contracts. Once we have these long-term charter contracts, we will get investors into the fund. Currently, the fund only has Keppel as an investor and our intention is to bring in other investors,” Loh adds.
As he tells it, Keppel is not directly impacted by the oil price. However, for more than 10 years, the international oil majors have been focused on production. “Their reserves have been depleted, not knowing how long fossil fuels’ economic life still exists. The action during crises is that fossil fuel will be here for much longer and the long-dated oil cycle is much higher. We are starting to see that these oil companies are planning to replenish reserves and as a consequence we are seeing better enquiries for the rigs we have. There is more activity expected in offshore exploration and that bodes well for our rigs,” Loh says.
When asked if the rigs can be revalued higher from their current valuation of $4 billion, Loh replies that it depends on the rig market and day rates. The spot rate of oil is less important, he says, adding: “It is more important to look at the longer-term prognosis for oil price.” AssetCo has 13 rigs of which six are completed — and some are also chartered — and seven are in various stages of completion. AssetCo has sufficient cash to complete the seven rigs, Loh indicates.
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Lim says the more accurate indicator of demand and charter rates is the rig count. “The market is consolidating in terms of scrapping. We saw a massive consolidation of drillers and this augurs well for day rates.”
Separately, the approval for the sale of M1 to Simba has been delayed, and Keppel and Simba have extended their long-stop date to May 21. “That is enough time for the approval to be given. I wouldn’t want to speculate on what happens if the approval is not forthcoming. In anything that Keppel does, if [we’re] dealing with uncertainty, we would have contingency plans. At this point in time, let’s work on Plan A and if not we have contingency plans in place,” Loh says.
In its 1QFY2026 business updates for the three months to March 31, net profit for the New Keppel, excluding the non-core portfolio for divestment and discontinued operations was slightly lower y-o-y. Stronger performances in the infrastructure and connectivity segments were offset by lower contributions from the real estate segment, which had benefitted from higher valuation and divestment gains in 1QFY2025.
Keppel announced positive free cash inflow in 1Q2026 compared to an outflow in 1Q2025. The company recorded cash inflows from both operating and investing activities, compared to outflows in 1Q2025.
In line with Keppel’s business model, the majority of investments under the New Keppel comprises sponsor stakes in Keppel’s private funds, REITs and trust, as well as co-investments alongside them.
The company receives divestment proceeds related to and distributions from such sponsor stakes and co-investments. This inflow was almost three quarters of the amount received for FY2025.
