Keppel Infrastructure Trust Delivers Robust Growth, Expands Portfolio with Accretive Acquisitions

Keppel Infrastructure Trust (KIT) has reported a solid performance in FY 2024, with an 8.6% year-on-year increase in Funds from Operations (FFO) to $277.8 million. The trust’s Distribution Per Unit (DPU) also grew by 1.0% to 3.90 cents, supported by the resumption of contribution from the Keppel Merlimau Cogen Plant (KMC), new acquisitions, and steady portfolio performance.

Key Highlights:

– KIT’s Assets Under Management (AUM) grew by 22% year-on-year to \$9.0 billion, driven by new acquisitions and growth in existing businesses. – The trust made several strategic acquisitions in FY 2024, including a German solar portfolio, the Keppel Marina East Desalination Plant in Singapore, and a majority stake in Ventura, a bus operator in Australia. – Ixom, City Energy, and Philippine Coastal Storage & Pipeline Corporation recorded strong EBITDA performance, demonstrating the success of KIT’s value creation initiatives. – KIT’s portfolio is now well-diversified across geographies and business segments, with a focus on energy transition, environmental services, and distribution and storage.

Shareholder Considerations:

– The trust’s Distributable Income (DI) for FY 2024 was \$200.6 million, compared to \$316.8 million in FY 2023, which included a special distribution of \$131.2 million. Adjusting for one-offs and timing differences, FY 2024 DI would be \$215.6 million, representing a 2.8% increase year-on-year. – The trust’s balance sheet remains strong, with a net gearing ratio of 40.4% and an interest coverage ratio of 7.0x as of 31 December 2024. – KIT is seeking Unitholders’ approval for a proposed KIHPL Placement Mandate, which would allow its sponsor, Keppel Infrastructure Holdings Pte. Ltd. (KIHPL), to participate in future placements to maintain its 18.21% stake in the trust.
Overall, KIT’s robust financial performance, strategic acquisitions, and focus on value creation have positioned the trust for continued growth and long-term sustainability. Investors should closely monitor the trust’s progress and the potential impact of the proposed KIHPL Placement Mandate on the trust’s unitholders.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.

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