Keppel plans significant data centre expansion in 2024

Keppel reported a 14% growth in recurring income for the first nine months of 2024, with plans to expand its data centre capacity significantly.

The net profit for the period remained stable year over year, excluding the impact of Keppel's legacy offshore and marine assets. This steady performance was primarily attributed to increased contributions from asset management as well as operating income.

Asset management fees rose 68% year over year, reaching SGD $299 million by the third quarter of 2024. This growth was observed across all three segments of the company's operations.

Keppel announced an ambitious plan to expand its current data centre capacity from 650 megawatts to 1.2 gigawatts. This expansion is accompanied by an additional SGD $10 billion growth in funds under management (FUM).

Additionally, the company has revealed approximately SGD $730 million in asset monetisation so far this year. Keppel's business update showed that the third quarter's net profit was lower than the previous year due mainly to the absence of valuation and divestment gains in the Connectivity segment.

The effects of the legacy offshore and marine assets include the profit and loss effects from Seatrium shares, the Asset Co vendor notes, and stakes in Floatel and Dyna-Mac, as explained in previous results announcements. These figures for the third quarter of 2023 and nine months of 2023 exclude discontinued operations.

The asset management fees comprise the total of all fees from subsidiary managers, joint ventures, and associated entities, alongside the share of fees based on shareholding stakes with strategic allies.

The FUM projections utilise the gross asset value of investments, considering uninvested capital commitments on a leveraged basis, to anticipate fully invested figures.

Keppel's steady growth in recurring income and ambitious expansion of its data centre capacity reflect its strategic focus on asset management and infrastructure. The company's plans to double data centre capacity, alongside a significant increase in funds under management, demonstrate its commitment to addressing rising digital demands while reinforcing its financial position.

These efforts and ongoing asset monetisation indicate a continued focus on long-term growth across its diversified business segments, setting a stable foundation for future profitability in a transforming market landscape.