Keppel Infrastructure Trust posts 23% rise in Q1 earnings

Singapore

KEPPEL Infrastructure Trust (KIT) reported a 23.1 per cent rise in earnings for the first quarter ended March 31 to S$4.3 million as lower electricity and trust expenses outweighed the dip in revenue.

Group revenue for the period slipped 1.1 per cent to S$16.6 million.

Finance income, representing the accretion on the service concession receivables in respect of the fixed capital cost and recovery components, fell 6 per cent to S$3.8 million in the first quarter, in line with lower service concession receivables.

Operation and maintenance (O&M) income was S$12.8 million for the quarter, 0.5 per cent higher than for the corresponding period in 2014. The rise was mainly due to higher production of NEWater and higher O&M tariffs due to changes in the consumer price index (CPI), partially offset by lower output from the waste-to-energy plants and lower power tariff arising from changes in fuel price.

Cash generated from operations for the quarter was S$13.5 million, down from S$14.4 million in the first quarter of 2014. "The lower cash generated from operations was mainly due to the transaction costs paid in relation to the proposed transaction with CitySpring Infrastructure Trust and the acquisition of a 51 per cent stake in Keppel Merlimau Cogen Pte Ltd," said KIT.

No distribution has been declared or recommended for the quarter ended March 31.

"The underlying performance of the three assets in KIT's portfolio is expected to remain stable," KIT said in its financial statement.

All three assets have long-term concession agreements with Singapore statutory bodies, namely National Environment Agency (NEA) and Public Utilities Board.

KIT had last September entered into an agreement with NEA to provide additional incineration capacity at the Senoko waste-to-energy plant. The upgrade is planned to take place between the third quarter of this year and the same period next year and will progressively increase the contracted incineration capacity of the plant by up to 10 per cent from 2,100 tonnes per day. This is expected to increase the operating cash flows from the plant.

"After the completion of the proposed transactions, the trustee-manager will manage a significantly larger portfolio, where it will continue to evaluate asset enhancement opportunities. In addition, the trustee-manager will seek suitable acquisitions opportunities, including those from the sponsor, under its expanded investment mandate to further grow the trust," said KIT.

KIT closed trading on Monday unchanged at S$1.10.