Keppel Infrastructure Trust posts H1 DPU of 1.86 Singapore cents

KEPPEL Infrastructure Trust (KIT) on Wednesday announced a distribution per unit (DPU) of 1.86 Singapore cents for the first-half ended June 2021, unchanged from the corresponding period last year.

This was despite its free cash flow to equity (FCFE) having fallen 11.2 per cent to S$100.6 million.

Loss attributable to unitholders was S$3 million, a reversal from S$45.2 million in profit recorded a year ago. KIT was hit by an impairment loss on Ixom's assets and arbitration provisions for Australian subsidiary, Basslink.

Ixom, which supplies and distributes water treatment, industrial and speciality chemicals in Australia and New Zealand, was informed by a significant long-term customer that the customer will be ceasing operations within 12 months. This resulted in an impairment provision of S$17 million in relation to assets including plant and machinery, intangible customer contracts and right-of-use assets.

KIT's other operating expenses increased 59.5 per cent to S$79.4 million, after an additional arbitration provision of S$23.8 million for Basslink, which is in the business of transmitting electricity and telecoms in Australia via subsea interconnectors. The company is undergoing arbitration to resolve disputes over a cable failure in December 2015.

Revenue inched down 1 per cent to S$783.5 million, largely driven by lower contribution from Ixom and partly offset by the higher contribution from City Gas.

But Ixom delivered a stable FCFE of S$38.7 million for H1, and is expected to deliver its projected cash distribution targets for the financial year, KIT said.

City Gas delivered lower FCFE of S$19.7 million, down 32 per cent, mainly due to a time lag in the adjustment to the gas tariffs in response to changes in the underlying fuel cost, it added.

Meanwhile, Philippine Coastal started contribution to KIT in January and delivered FCFE of S$3.8 million for the first half of the year.

KIT had net gearing of 30.1 per cent as at June 30, which the trustee-manager said will provide a "comfortable debt headroom to pursue growth opportunities".

About 88 per cent of KIT's total loans have been hedged as at end-June.

The trustee-manager plans to 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.

Unitholders can expect to receive their distributions on Aug 13.

The counter ended at S$0.55 on Wednesday, up 0.5 cent or 0.92 per cent.