FY2023 was a year of superlatives for Keppel Infrastructure Trust A7RU (KIT). The infrastructure trust delivered a record performance. Distributable Income increased 42.4% y-o-y to $316.8 million for FY2023, and 2HFY2023 distributable income rose by 36% to $183.87 million.
Distributions include the $131.2 million in capital optimisation at Ixom which was distributed to unitholders in November 2023. Distributions per unit (DPU) in FY2023, including a special DPU of 2.33 cents surged 61% to 6.19 cents. Excluding the special DPU, DPU would still have been higher but by a modest 1% y-o-y to 3.86 cents.
In FY2023, KIT achieved record EBITDA for City Energy, Ixom and Philippine Coastal. During FY2023, KIT announced the acquisition of a 45% interest in a residential solar portfolio in Germany; and completed the acquisition of Fäbodliden II, a 17MW Swedish onshore wind farm, in December 2023.
In Singapore, City Energy completed the acquisition of Tan Soon Huah’s (TSH) Liquified Petroleum Gas (LPG) business in October 2023. TSH is the second largest LPG cylinder distributor in Singapore. City Energy achieved 100% plant availability in FY2023. However, the Keppel Merlimau Cogen (KMC) plant, which resumed operations in December 2023,saw lower availability of 95.8% due to an unplanned outage in 4Q2023. The plant resumed operations in December 2023.
Operations at the Senoko WTE Plant, Keppel Seghers Tuas WTE Plant, Keppel Seghers Ulu Pandan NEWater Plant and SingSpring Desalination Plant remained stable and the plants fulfilled their contractual obligations in FY2023, KIT said in a press release.
KIT’s Trustee-Manager has secured an extension for the concession of the Senoko Waste-to-Energy (WTE) Plant with Singapore’s National Environment Agency (NEA) for three years with an option to further extend by another year.
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Eco Management Korea (EMK) maintained full utilisation of its incineration capacity and secured new contracts for its landfill business.
Ixom saw strong volume from its manufactured chemicals business due to higher coagulant and chlorine volumes in Australia. Ixom also saw higher volume in its industrial and diary segments in the New Zealand business with good weather conditions contributing to a strong dairy season.
Philippine Coastal Storage and Pipeline Corporation (Philippine Coastal) saw record tank utilisation rate of almost 100% as at end-December 2023, up from 66% in 2021, underpinned by increased demand. Philippine Coastal has also secured a contract renewal with a major customer at an attractive price for four years with an option to extend for another five years. Philippine Coastal’s construction of new tanks to support greater storage demand is on track for completion by 2H2024.
Analysts have mooted the Keppel Marina East Desalination Plant as a possible acquisition in the future.
KIT's sterling performance could have been a result of its Trustee-Manager’s changed fee structure which is likely to have spurred KIT’s growth. In 2H2023, the Trustee-Manager’s fee rose by more than 3x to $42.1 million and by a more modest 36% in FY2023 to $56.57 million.
