Keppel Infrastructure Trust (KIT) has declared a distribution per unit (DPU) of 1.86 cents for the 1HFY2021 ended June, unchanged from the same period the previous year.
The unchanged DPU comes despite a decline in EBITDA by 3.9% y-o-y for the 1HFY2021 to $193.5 million, while free cash flow to equity (FCFE) came in at $100.7 million for the period, down 11.2% y-o-y.
KIT’s trustee-manager attributes the lower EBITDA and FCFE to the under recovery of fuel cost at City Gas as a result of the timing differences in the fuel price pass through gas tariff mechanism.
The DPU will be paid out on August 13 and translates to a distribution yield of 6.7%, based on KIT’s closing price of 55.5 cents as at June 30.
For its distribution and network segment, the manager reports that City Gas’ customer base grew 1.3% y-o-y to approximately 873,000 as at end-June. However, despite the increase in its customer base, KIT recorded “slightly lower” gas demand y-o-y for the 1HFY2021 due mainly to the lower consumption from commercial and industrial (C&I) customers amid the Phase 2 (Heightened Alert) period.
In the Philippines, fuel storage utilisation rate has been stable at Philippine Coastal Storage and Pipeline Corporation (Philippine Coastal). At the same time, the process of integrating Philippine Coastal to the trust’s portfolio has been completed. The trustee-manager anticipates stronger fuel storage demand as the Philippines economy recovers gradually from the Covid-19 pandemic.
For Ixom, the manager highlights its acquisition of Australian Botanical Gardens, a supplier of essential oils and blended ingredients, in April, which is expected to enhance its product offerings in the life science segment.
Meanwhile, Basslink achieved 99.8% availability in 1H2021, and the commercial risk sharing mechanism was positive at 4.9% for the same period. In May, Basslink secured a three-month extension of its loans to August. The trustee-manager is working towards securing a longer-term refinancing package to match the operational lifespan of the asset.
In the energy segment, the Keppel Merlimau Cogen plant achieved 100% contractual availability as at end-June. For the waste and water segment, operations at the Senoko Waste-to-Energy (WTE), Keppel Seghers Tuas WTE, Keppel Seghers Ulu Pandan NEWater and SingSpring Desalination achieved availability above their contractual obligations in 1H2021.
In July, KIT announced that it will acquire the remaining 30% stake in SingSpring Desalination Plant for $12 million. The DPU-accretive acquisition is expected to be completed in 3Q2021.
Looking ahead, the trustee-manager says it will continue to grow KIT through acquisitions that will add to the Trust’s long-term value proposition. To achieve this, the trustee-manager will look to deepen and expand its talent pool and widen its investible universe across the infrastructure spectrum to include renewables and social infrastructure, which are among the key growth areas under Keppel’s Vision 2030.
Units in KIT closed flat at 54.5 cents on July 28.
Photo: KIT
