SINGAPORE (July 17):  The trustee-manager of Keppel Infrastructure Trust (KIT) has declared a distribution per unit (DPU) of 0.93 cent for the second quarter ended June, bringing total DPU to 1.86 cents for 1H17.

Revenue for the quarter was $158.8 million. This brings total revenue for 1H17 to $314.1 million – 16.9% higher than the $268.6 million reported in 1H16.

According to the trustee-manager, this was due to higher contributions from City Gas as a result of higher town gas tariff and higher volume of town gas sold; higher revenue from Basslink as no facility fees were recognised during the cable outage which occurred between 20 December 2015 and 12 June 2016; and higher revenue from KMC.

Net asset value (NAV) per unit fell to 30.7 cents as at end-June, from 32.5 cents as at end-2016, due to distributions to unitholders as well as marked-to-market movements of derivative financial instruments.

Distributable cash flows of $73.0 million for 1H17 came in $5.7 million lower than in 1H16, mainly due to time lag in the adjustment of gas tariffs to reflect actual fuel cost at City Gas, as well as abortive expenses incurred by the trust in connection with a potential acquisition.

The trustee-manager says KIT’s assets typically generate stable cash flows, with repairs and maintenance of the plants provided for as scheduled outages.

However, if such an outage lasts longer than anticipated and causes the availabilities of the plants to fall below their respective contracted levels, the plants will not be able to receive full payments due under their contracts.

Meanwhile, City Gas’ performance could fluctuate depending on changes in economic conditions and time lag in the adjustments of gas tariffs in response to changes in fuel costs.

Waste and water concessions have long-term contracts with Singapore statutory bodies and derive most of their cash flows from capacity and availability payments. As such, the underlying performance of these assets is expected to remain stable.

Units of KIT closed flat at 58 cents on Monday.

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