Aussie power unit drives KIT's Q3 net profit up 96% to $17m

Turnover from the concessions, including the Senoko Waste-to-Energy Plant, fell but was partly offset by higher revenue from the Senoko boiler upgrade.
Turnover from the concessions, including the Senoko Waste-to-Energy Plant, fell but was partly offset by higher revenue from the Senoko boiler upgrade.PHOTO: KEPPEL INFRASTRUCTURE TRUST

Trust declares DPU of 0.93 cent for the quarter even as revenue dips to $160m

Keppel Infrastructure Trust (KIT) has declared a distribution per unit of 0.93 cent for the third quarter, unchanged from the same period a year ago.

Attributable net profit surged 95.6 per cent to $17 million for the three months to Sept 30, thanks to "positive CRSM (commercial risk sharing mechanism) variances and higher other income recognised in Basslink", said Keppel Infrastructure Fund Management, the trustee-manager. Basslink is KIT's Australian electric power line unit.

However, revenue in the quarter dipped 0.2 per cent to $160.3 million. Attributable profit for the nine months nearly doubled to $33.5 million, while revenue climbed 0.2 per cent to $428.9 million.

City Gas turned in a lower revenue at $72.1 million for the third quarter as "town gas tariff decreased with lower fuel prices", the trustee-manager noted.

Turnover from the concessions - comprising the Senoko Waste-to-Energy (WTE), Tuas WTE, SingSpring and Ulu Pandan NEWater plants - also fell but it was partly offset by higher revenue from the Senoko boiler upgrade.

  • AT A GLANCE

  • NET PROFIT: $17 million (+95.6%)

    REVENUE: $160.3 million (-0.2%)

    DISTRIBUTION PER UNIT: 0.93 cent (Unchanged)

The upgrade was completed during the quarter and has "increased the contracted incineration capacity of the plant by 10 per cent to 2,310 tonnes per day, which translates to higher operating cash flows", said the trustee-manager.

Basslink's revenue grew to A$21.7 million (S$22.1 million) during the quarter from A$12.1 million previously "due to positive CRSM recognised", while CityNet's revenue at $1 million was stable.

Revenue contributions from the Keppel Merlimau Co-generation, which started after its acquisition on June 30, came in at $32.5 million.

Earnings per unit doubled to 0.44 cent, while net asset value per unit fell from 35.3 cents as at Dec 31 to 31.6 cents as at Sept 30.

In its results report, the trustee-manager addressed the Basslink outage last December, noting that it was taken out of service due to a cable fault, the cause of which is still being investigated.

It added that Basslink is in discussion with Hydro Tasmania and the banking syndicate on matters arising from the outage. Hydro Tasmania has not paid Basslink facility fees since September this year - for which Basslink did not receive prior notification - as Hydro Tasmania disagrees that the outage was a natural or unavoidable event.

"An advance payment of A$40 million has been made by the insurer to Basslink, out of which A$11 million was used to pay for part of the repair costs of the interconnector," it said. "While the remaining advance payment received is sufficient to cover Basslink's operating needs, its usage is subject to the consent of the banking syndicate due to the aforesaid subsisting default."

KIT units closed flat at 50.5 cents yesterday, before the results were announced.

A version of this article appeared in the print edition of The Straits Times on October 18, 2016, with the headline 'Aussie power unit drives KIT's Q3 net profit up 96% to $17m'. Print Edition | Subscribe