The Business Times
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LETTER TO THE EDITOR

Distributable income is better metric for assessing Keppel Infrastructure Trust’s performance

Profit after tax not as relevant a metric for business trusts such as KIT

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Published Thu, Aug 1, 2024 · 05:00 AM
    • Some infrastructure assets may record lower accounting profit after tax or even a loss, while their cash flows remain positive and contribute to the pool of distributable income from which distributions are paid.
    • Some infrastructure assets may record lower accounting profit after tax or even a loss, while their cash flows remain positive and contribute to the pool of distributable income from which distributions are paid. PHOTO: BT FILE

    I REFER to the article “Keppel Infrastructure Trust reverses into the red with a loss of S$23.9 million in H1 2024” (BT, Jul 26), which highlights profit after tax (PAT), a metric that is not as relevant to a business trust such as Keppel Infrastructure Trust (KIT).

    As investors in a business trust, KIT’s unitholders are more focused on steady, predictable and recurring cash distributions, which are paid out of the trust’s operating cash flows. This is unlike companies, which may only make dividend payments out of accounting profit.

    Therefore, the ability to pay distributions from cash flows is important for business trusts, such as KIT, which is focused on generating stable and resilient operating cash flows that support distributions to unitholders.

    Letter to the EditorKeppel Infra Trust

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