Data centre demand drives Keppel's annual profit higher

(Reuters) - Singapore’s Keppel posted a 5% rise in its full-year underlying profit on Wednesday, as earnings for its connectivity segment were boosted by strong demand for digital infrastructure required for artificial intelligence-based services.

 

Annual net profit for Keppel’s connectivity arm, which operates its data centre business, rose nearly 45%. Data centres house computer servers and equipment that companies use to process and store data.

 

The jump in the segment’s profit comes amid rising demand for AI and digital infrastructure which is set to fuel increased investment linked to data centres in the Asia Pacific region.

 

Keppel, which was founded over 56 years ago and traces its roots to a shipbuilding yard, said in October that it intends to more than double its data centre funds under management and expand its capacity.

 

Keppel’s highest-earning infrastructure segment, on the other hand, saw its profit fall 4% to S$673 million for the 12 months ended Dec. 31, due to a drop in fair value gains from sponsor stakes and lower distributions from unit Keppel Infrastructure Trust.

 

The asset manager’s net profit from continuing operations, excluding the effects of the legacy offshore and marine (O&M) assets, rose to S$1.06 billion ($784.20 million) in 2024, from S$1.02 billion reported a year earlier.

 

Keppel, which is transitioning into an asset manager with a target of overseeing S$200 billion by 2030, said its funds under management had reached S$88 billion by December-end. 

 

The firm declared a final dividend of 19 Singapore cents per share, same as last year.

 

($1 = 1.3517 Singapore dollars)

(Reporting by Aaditya Govind Rao & Rajasik Mukherjee in Bengaluru; Editing by Rashmi Aich)