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Stable Results At K-Green Trust

kgreen trust logoK-Green Trust (SGX: LH4U) is a business trust constituted on 23 July 2009 and managed by Keppel Infrastructure Fund Management. The trust invests in “green” infrastructure assets globally with a focus on Asia, Europe and the Middle East.

The trust’s portfolio includes Senoko Waste-to-Energy Plant, Keppel Seghers Tuas Waste-to-Energy Plant and Ulu Pandan NEWater Plant.

In the third quarter, K-Green Trust posted a 0.3% rise in year-on-year revenues to S$17.18m. Net profit increased 7.4% from S$3.5m to S$3.8m thanks to lower electricity costs, trust expenses and higher “other income”.

However, for the first nine months of the year, revenue dipped almost 14% to S$51m. Despite the drop in revenue, net profit only fell 5% S$10.8m. as a result of lower electricity costs as well as lower taxes.

Interestingly, there are some positives from the 9-month figures if not for the surge in Trust expenses that more than doubled from S$471m to S$1,281m. Nevertheless, the management clarified that the higher expenses can be attributed to project evaluation and due diligence exercises incurred by the Trust.

The group had no external borrowing as at 30 Sept 2013 and has long-term concession agreements with two Singapore government bodies, namely the NEA and PUB. The utility assets offer a stable source of income with little correlation to economic fluctuations, with only electricity costs being the biggest cost factor.

The shares currently cost $1.015 with a dividend yield of 6.17%. The Net Asset Value per unit was $0.99 compared to $1.02 three months ago due to the distribution payment of 3.13 cents in August.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.   Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.