Keppel Infrastructure Trust's distributable cash flow down 18.8% in Q3

KEPPEL Infrastructure Trust (KIT) announced on Wednesday that its distributable cash flow (DCF) fell 18.8 per cent to S$45.2 million in its third quarter.

In a business update released after trading hours, it attributed the drop mostly to a fall in DCF for the distribution and network sector, which fell 32.9 per cent to S$22.98 million. Its waste and water segment also shrank 3.8 per cent to S$17.9 million. However, this was offset by the energy sector, which rose 15.7 per cent to S$12.5 million.

In a further breakdown of its distribution and network sector, the decline in contribution from Ixom's DCF was mainly due to budgeted capital expenditure that was deferred from H1 2020 due to Covid-19 lockdowns. Meanwhile, the lower DCF for City Gas was a result of a timing difference inherent in the fuel price pass through gas tariff mechanism.

KIT's Ebitda (earnings before interest, taxes, depreciation and amortisation) went up 7 per cent to S$83 million in its third quarter.

As at Sept 30, its net gearing stood at 33.7 per cent, with about 81 per cent of its total loans hedged.

KIT'S trustee-manager said that it will drive organic growth from existing going-concern businesses such as City Gas and Ixom, which it said are supported by long-term favourable demand trends.

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It will also focus on acquisitions that generate defensive cash flows and revenues that are inflation- or GDP-linked, and with potential for growth, high barriers to entry and key providers of essential products and services. It is also looking at potential bolt-on acquisitions at City Gas and Ixom, as well as partnerships with experienced operators on greenfield investments with limited construction exposure.

Units of KIT closed up half a Singapore cent to end at 55.5 cents on Tuesday, prior to the announcement.