Keppel Ltd. said net profit at its core business rose more than 20% in the first nine months of 2026, and that it has already announced about S$3.7 billion of non-core asset sales, beating the S$2 billion to S$3 billion it had targeted for the full year.

The voluntary business update, released Oct. 29, matters for investors because Keppel now asks to be judged as an asset manager and operator of energy and data infrastructure, not as the shipyard and property conglomerate it once was. The figures support that case for the core business. The legacy book still weighs on headline earnings.

In the third quarter alone, net profit at what the company calls the New Keppel rose close to 15% from a year earlier, helped by stronger results from its Connectivity unit and steady earnings from Infrastructure. The New Keppel excludes a portfolio of assets earmarked for divestment, such as legacy offshore rigs, residential land and the M1 telecom business, along with discontinued operations.

Two sets of numbers at Keppel

Including those assets, the picture is mixed. Overall third-quarter net profit was 20% higher than a year earlier, but overall nine-month net profit fell 40%. Keppel blamed a 4% reduction in the gross asset value of the non-core assets that remain on its books, mainly from impairments, depreciation and the cost of operating and holding them. The company did not give absolute profit figures in the update.

To make the split clearer, Keppel said it will start reporting changes in the gross asset value of the non-core portfolio going forward. Ordinary dividends will be set by New Keppel earnings, while the company aims to pay out 10% to 15% of realized proceeds from non-core sales as special dividends.

So far this year, Keppel has realized about S$940 million in cash from those sales. It expects roughly another S$600 million once it completes the transfer of the first six legacy rigs to Keppel Offshore Fund, which it targets by the end of 2026. Announced deals include the proposed sale of a 51% stake in Keppel South Central to Keppel REIT.

Chief Executive Loh Chin Hua said in the release that Keppel had beaten its sales target despite volatile markets, and that the proceeds would help fund growth, cut debt and reward shareholders.

Investors liked the update. Keppel shares rose as much as 2.4% on Oct. 29, their best session in a month, while the broader Singapore benchmark gained 0.5%, according to Reuters.

Fund growth and the AI question

Asset management remains the engine. Keppel said it added about S$19.5 billion of new funds under management this year, roughly half from infrastructure and connectivity strategies. It passed its end-2026 goal of S$100 billion in funds under management in July. Asset management fees rose 18% to S$354 million in the nine months, and net profit from asset management grew 30%. Earnings from sponsor stakes and co-investments in its own funds rose 2.9 times.

Recurring income grew more than 10% over the period. Keppel also said its deal pipeline stands at about S$23 billion, and that in October it signed a framework agreement with Apollo to explore large private capital deals for Asia Pacific companies and asset owners, with Keppel as general partner.

On the operating side, EBITDA at the integrated power business rose 7%, driven by the 600-megawatt Keppel Sakra Cogen plant, which began operating at the end of May. As of end-September, 43% of the division's contracted generation capacity was locked in for three years or longer. Long-term contracted revenue for decarbonization and sustainability solutions reached S$8.1 billion.

Connectivity, which houses the data center business, added 50 megawatts of new Singapore capacity under the government's second data center call for applications. Its technology solutions arm lifted revenue above S$900 million and won S$615 million of new contracts across Singapore, Malaysia and Vietnam in the nine months.

Loh addressed doubts about heavy spending on artificial intelligence directly. He said Keppel expects AI to keep reshaping industries, but that its data center, energy and connectivity assets serve the wider digital economy, “including but not limited to the growth of AI.”

Legacy rigs and what comes next

The hardest part of the cleanup is the offshore rigs left over from Keppel's old marine business. In October, a Keppel rig-holding entity agreed with Seatrium to finish construction on four remaining rigs under an existing services arrangement. The first two are due for delivery in 2027 and 2028, and plans for the other two are still under review. Keppel aims to move up to 10 legacy rigs into Keppel Offshore Fund, which it manages and in which Apollo is a limited partner.

Keppel also said in October it was appointed to aggregate 120 megawatts of imported biomethane for 15 years under Singapore's Biomethane Sandbox, with the gas to be blended into power supplied to energy-hungry users including data centers.

The next test is completion of the first six-rig transfer by year-end, which would bring in the expected S$600 million and give a first read on how much special dividend shareholders can expect when Keppel reports full-year results.