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Keppel Infrastructure Trust posts Q2 DPU of 0.93 Singapore cent
KEPPEL Infrastructure Trust (KIT) on Wednesday posted a second-quarter distribution per unit (DPU) of 0.93 Singapore cent, unchanged from a year ago, even as its distributable cash flow increased.
For the second quarter ended June 30, distributable cash flow increased 35.8 per cent year on year to S$62.2 million, driven by a better performance in its mainstay distribution and network segment.
Cash flow from that segment increased 83.8 per cent on the year to S$40.2 million, even as other segments (energy, and waste and water) saw declines. Businesses and assets in the distribution and network segment include City Gas and City-OG Gas in Singapore, and Ixom in Australia.
Generally, KIT’s businesses and assets are classified as essential services; it has thus continued to operate throughout the Covid-19 pandemic.
But in Q2, City Gas saw a reduction in supplying town gas to commercial and industrial customers during Singapore's partial lockdown. The reduced volume was only partially offset by higher usage by residential customers. Still, City Gas recorded a higher distributable cash flow, largely due to a timing lag in the adjustment to the gas tariffs in response to changes in underlying fuel costs.
Ixom recorded a stronger performance from its life-science segment due to increased demand for cleaning and hygiene products, which offset weaker demand from the pulp and paper, and metals and mining segments. There was also a pick-up in volumes in the dairy segment due to recovering drought conditions in New Zealand.
Overall, profit attributable to unitholders was up 64.4 per cent to S$26.2 million, due to higher profit recorded by Ixom and City Gas.
KIT said it will continue to monitor the Covid-19 situation "as countries start to slowly regain their footing". It will also continue to review "a pipeline of potential acquisition opportunities" to further strengthen its long-term income stream.
KIT’s gearing level was 33.6 per cent as at June 30, providing it with "comfortable" debt headroom to pursue growth opportunities. To mitigate against fluctuating interest rates, nearly 81 per cent of KIT’s total loans have been hedged as at end-June.
From the second half of 2020, KIT will adopt a half-yearly announcement of financial statements as well as half-yearly distributions.
Units of KIT closed down 0.93 per cent at S$0.535 on Wednesday before the announcement.