Acquisitions boost Keppel Infrastructure's Q3 performance

SINGAPORE - Keppel Infrastructure Trust on Monday declared a distribution per unit (DPU) of 0.93 Singapore cent for its third quarter ended Dec 31, 2015.

Group revenue rose 33.8 per cent to S$160.5 million, while net profit attributable to unitholders returned to the black, with a profit of S$8.67 million. A year ago, it made net losses of S$10.7 million.

In tandem with this, earnings per unit were 0.22 Singapore cent, compared to losses per share of 0.71 Singapore cent a year ago.

The higher revenue was mainly due to acquisitions completed in mid-2015. Assets acquired from Crystal Trust (Senoko Waste-to-Energy, Tuas WTE and Ulu Pandan NEWater Plants) collectively contributed S$24.6 million in turnover in Q3, while Keppel Merlimau Cogen contributed revenue of S$32.5 million. These in turn also helped to boost earnings.

The better performance was despite a higher negative "commercial risk sharing mechanism" adjustment incurred by Basslink and the impact of the outage of the link since December 20, 2015.

Basslink is an electricity interconnector between the electricity grids of the states of Victoria and Tasmania in Australia. The trust said the cause is still being investigated. The link is currently estimated to resume operations in March 2016.

For the nine-month period, the trust recorded a 12.5 per cent increase in revenue to S$427.9 million, while net profit to unitholders likewise returned to the black with S$15.5 million generated.

Total assets grew from S$1.8 billion at end-March 2015 to S$4.1 billion at end-December 2015 with the completion of the acquisitions. But to be sure, total liabilities also rose - from S$1.6 billion to S$2.5 billion over the same time period.

Talking about its prospects going forward, the trust said its unit City Gas' performance could fluctuate depending on changes in tariffs in response to changes in fuel costs; the performance of its waste and water concessions are expected to remain stable; and the upgrade to increase the incineration capacity at the Senoko WTE plant should be completed in Q3 2016. The development of DataCentre One is also in progress and is scheduled to be completed in Q1 2016.

As for Basslink, the "commercial risk sharing mechanism" may fluctuate in the short term and affect its revenues. The mechanism may be reviewed in April 2016.

The trust ended trading a cent lower at S$0.475 on Monday.

This article was first published on Jan 19, 2016.
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