Rising AI Demand Fuels Record Profit for Keppel's Connectivity Sector

Keppel's Expansion in Data Centres Bolsters Profit Margins

As the world increasingly relies on artificial intelligence and digital infrastructure, Keppel has reported a remarkable upswing in its annual net profit within its connectivity division. This segment, which is pivotal in operating data centres, observed an impressive 45% profit increase. This development is driven by the burgeoning demand for AI-technologies and the accompanying digital infrastructure—key factors in the escalation of data centre investments across the Asia Pacific region.

Singapore-based Keppel announced a 5% rise in its overarching full-year underlying profit, attributable to the robust performance of its connectivity division. The infrastructure for AI-driven services demands substantial digital resources, thereby elevating Keppel’s role as a provider of essential data hosting facilities.

Historically rooted in shipbuilding, Keppel has shifted focus to technological innovation and data management. In a strategic move disclosed in October, the company aims to over twofold its data centre funds under management while significantly expanding its operational capacity.

Despite the successes in connectivity, Keppel’s primary infrastructure segment saw a decline in profit, falling by 4% to S$673 million over the course of the year. This dip is due to decreases in fair value gains from sponsor stakes and reduced distributions from the Keppel Infrastructure Trust.

Elsewhere, Keppel's progression as an asset manager is noticeable with an increase in net profit from continuing operations, rising to S$1.06 billion (equivalent to $784.20 million) in 2024, compared to the S$1.02 billion seen the previous year. As of the year’s end in December, Keppel’s funds under management have reached S$88 billion, solidifying its ambitious plan to manage S$200 billion by 2030.

For shareholders, the company has announced a final dividend of 19 Singapore cents per share, sustained at the same level as the preceding year.

Currency Note: $1 equals 1.3517 Singapore dollars.