Keppel Infrastructure Trust - Stable DPU supported by divestment gains

Stable 2H 2025 distribution per unit (DPU) 

Distribution per unit grew by 1.0% year-on-year to 1.97 cents in 2H FY25. 

In FY2025, divestment gains of S$49.0 million or equivalent to 0.8 cent per unit contributed to the stable DPU. As such, FY2025 DPU grew 1.0% year-on-year to 3.94 cents, translating to a distribution yield of 7.4% based on the closing price of S$0.535 as at 6 February 2026. 

Mixed financial performance across business segments

FY2025 Distributable income increased 24.4% year-on-year to S$249.5 million.   The key drivers of the higher distributable income were the divestments of Philippine Coastal and partial stake in Ventura.  Keppel Infrastructure Trust received S$301 million. 

Since 2019, Keppel Infrastructure Trust has actively rejig the portfolio constitution with new assets.  Currently, the distributable income from the initial portfolio and new acquisition are fairly balance.

Energy transition recorded 27.8% growth in distributable income in FY2025. The increase was led by Aramco Gas Pipelines Company whose capital management generated a cash surplus of S$51.0 million in FY2025.  City Energy registered 24.1% year-on-year increase in distributable income in FY2025, due to fuel cost over-recovery and higher town gas volume, 

Energy transition recorded 27.8% growth in distributable income in FY2025. The increase was led by Aramco Gas Pipelines Company whose capital management generated a cash surplus of S$51.0 million in FY2025.  City Energy registered 24.1% year-on-year increase in distributable income in FY2025, due to fuel cost over-recovery and higher town gas volume, 

Environment services underperformed. Distributable income of this segment decreased by 36.7% to S$44.3 billion in FY2025. Senoko waste-to-energy reported S$31.8 million lower in contribution.  Eco Management Korea reported losses.  On the other hand, Keppel Infrastructure Trust booked S$9.9 million in full year contribution from Keppel Marina East Desalination Plant.   

Distribution and storage achieved higher distributable income despite divestment.  Distributable income grew by 17.3% to S$116.4 billion in FY2025.  This was despite the sale of Philippine Coastal in March 2025 and 25% stake sale in Ventura in August 2025.  Ixom reported 14.8% year-on-year growth in EBITDA, supported by demand from mining, oil and gas and diary customers.   

Digital infrastructure consist of the newly acquired GMG.   The purchase was concluded in November 2025. Keppel Infrastructure Trust deployed S$120m to acquire a 46.7% interest in GMG.  GMG started to contribute in December 2025, with a distribution of S$1.1 million. 

Improved balance sheet 

The debt maturity profile is well staggered, with 56% of S$3.2bn falling due over the next one to five years and only 32% within the next year. For FY2026, the Ixom loan has been refinanced to FY2029, which materially reduces near term refinancing risk. Maturities are light till FY2029. 

Gearing improved to 38.7% as at 31 December 2025, from 40.4% as at 31 December 2024.  Keppel Infrastructure Trust utilised about 60% of the S$301 million divestment proceeds to repay debt.   

Cost of debt declined slightly to 4.4% as at 31 December 2025, from 4.5% as at 31 December 2024. 

Total borrowings increased by 6.9% year-on-year to S$3.19 billion.  Of which 72.3% consists of non-recourse loans at the asset level.  The balance, or S$891 million are debt at the Trust level. 

The recent capital recycling exercise has enhanced financial flexibility.  With access to an undrawn committed credit facilities of S$239 million, Keppel Infrastructure Trust could pursue accretive acquisitions.    

Maintain Neutral and revise target price to S$0.50 

Based on its FY2025 DPU of 3.94 cents and closing price of S$0.535, Keppel Instructure Trust offers a distribution yield of 7.4%. To sustain its distributions, Keppel Infrastructure Trust will have to acquire new assets to support further cash flow generation. We maintain our NEUTRAL rating as we await more signs of sustainability in its distributable income. Our target price is raised to S$0.50  (from S$0.45)  due to lower interest rate assumptions.

Key risks include interest rate risk, foreign exchange risk, regulatory frameworks in different countries and volatile commodity or energy prices, amongst others.

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