Keppel Infrastructure Trust (SGX:A7RU) provided a 1Q24 business update. Adjusted EBITDA for the quarter came in at S$130.7m, up 3.8% y-o-y on the back of contributions from the newly acquired solar portfolio in Germany, as well as the resumption of contributions from Keppel Merlimau Cogen Plant (KMC).
Distributable income (DI) down 29.1% y-o-y
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The Environmental Services segment continued to deliver stable performance, with segmental distributable income up 3.7% y-o-y to S$20.9m.
Distributable income from the Distribution & Storage segment, however, was down 32.8% y-o-y to S$15.8m due to one-offs at both Ixom and Philippine Coastal.
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Lower 1Q24 DI due to one-offs
Distributable income at Ixom fell 28.4% y-o-y to S$15.1m due to higher finance cost, CAPEX, and operating expenses; while there was some FX impact, management shared that this was not material. We note that Keppel Infrastructure Trust has hedged 66.5% of foreign currency distributions as at 31 Mar 2024 to mitigate FX headwinds.
Meanwhile, distributable income at Philippine Coastal fell by 70.7% y-o-y to S$721k, on the back of S$3.3m worth of growth CAPEX and higher one-off upfront financing costs. Capacity expansion works at the asset are expected to be completed by 2H24.
Nonetheless, underlying performance of these businesses remained healthy, in our view. In particular, Philippine Coastal secured the renewal of a major customer contract, and achieved a high tank utilization rate of 96% during the quarter.
Extension of CTA for KMC allows the asset to resume DI contributions
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
