Keppel Infrastructure Trust announces sharp decline in total DPU, but 1% y-o-y growth in DPU excluding 2.33 cents from Ixom's capital optimisation

For its FY2024, Keppel Infrastructure Trust A7ru announced a sharp decline in total distributions per unit (DPU) of 36.9% y-o-y to 3.9 cents. Excluding the special DPU of 2.33 cents distributed in FY2023 from the crystallisation of Ixom’s capital optimisation, DPU inched up by 1% y-o-y.

Distributable income (DI) fell by 35.7% y-o-y to $203.73 million from FY2023’s $316.76 million.

FY2024’s DI would be $218.7 million after adjusting for performance fee (+$13.0 million) and upfront financing fee (+$2.9 million) net of a loan drawdown for capex (-$0.7 million) and base fees adjustment (-$0.2 million).

FY2023’s DI would be $209.7 million after adjusting for a debt repayment (-$22.4 million) and the Ixom capital optimisation (-$131.2 million) net of upfront financing fee (+$13.4 million), performance fee (+$19.1 million) and base fees adjustment (+$14.0 million).

According to KIT’s press release, excluding one-offs, DI for FY2024 was $203.7 million. This included the resumption of contribution from Keppel Merlimau Cogen Plant (KMC), as well as contributions from newly acquired German Solar Portfolio and Ventura completed during the year.

“Factoring timing differences as well as one-offs to better reflect underlying performance, FY2024 adjusted DI would be $218.7 million, 4.3% higher against FY 2023 adjusted DI of $209.7 million,” KIT says.

Assets under management (AUM) grew by 22% y-o-y in FY2024, to $9 billion following the acquisitions of the German solar portfolio, Ventura and Keppel Marina East Desalination Plant during the year.

In July 2024, KIT issued $200 million 4.90% perpetual securities. This was followed by a placement in August 2024 to raise gross proceeds of $200 million, which was 2.5 times subscribed. The proceeds of the fund raisings were utilised to repay the acquisition term loan drawn to partially finance the acquisition of Ventura.

As at Dec 31, 2024, the trust’s net gearing stood at 40.9%. To mitigate fluctuations in interest rates, approximately 72.9% of KIT’s total loans are fixed and hedged as at end-December.

KIT’s acquisition of a 45% interest in a residential solar portfolio in Germany, is projected to comprise approximately 60,000 bundled solar photovoltaic (PV) systems with a combined generation capacity of approximately 585 MW. The solar assets are leased to households under 20-year agreements, providing highly predictable cash flows to the Trust.

In Singapore, City Energy achieved 100% plant availability in FY2024 and maintained a sizeable customer base of more than 909,000, supported by the continued recovery in demand from the Commercial and Industrial sector.

City Energy Go, KIT’s EV charging business continued to progress in expanding its reach, which expect to translate to approximately 4,800 EV carpark lots across private residential and mixed-use developments when fully installed.

Following the extension of the capacity tolling agreement (CTA) for KMC by 10 years, from 2030 to 2040, KMC’s loan facility was restructured, allowing the plant to resume distribution income contributions to KIT in 2Q 2024. Contribution from KMC since the resumption of distributions totalled $37.0 million, representing 11.6% of FY2024 Asset Distributable Income.

KIT completed the acquisition of the Keppel Marina Desalination Plant (KMEDP) in December 2024, deepening its exposure to water treatment solutions. Operations at the Senoko WTE Plant, Keppel Seghers Tuas WTE Plant, Keppel Seghers Ulu Pandan NEWater Plant and SingSpring Desalination Plant remained stable, with the plants fulfilling their contractual obligations in FY2024.

The concession of the Senoko Waste-to-Energy (WTE) Plant with Singapore’s National Environment Agency (NEA) was extended beyond its expiry in August 2024 for three years with an option to further extend by another year.

Eco Management Korea (EMK) maintained full utilisation of its incineration capacity. Elsewhere, KIT expanded its footprint in Australia with the completion of the acquisition of Ventura, the largest bus operator in Victoria, Australia in June 2024.

Ixom continued to invest in its manufactured chemicals and trading business in Australia and New Zealand during the year. KIT’s trustee-manager announced the sale of KIT’s entire equity interest of 50% in Philippine Coastal Storage and Pipeline Corporation (Philippine Coastal) in October 2024.

With the divestment of Philippine Coastal for an enterprise value of US$460 million ($598 million), KIT is expected to realise a gain of US$21.1 million upon completion, which is expected in early 2025.