K-Green Trust

[KopiKat]

Hi Friends

COuld someone help to explain why revenue and net profit can drop for K-Green Trust?
I thought based on the tariff agreement, K-Green should continue to enjoy stable revenue and net profit?


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K-Green Trust net profit dropped 10.7 per cent to $3.9 million for the second quarter, from $4.3 million a year ago.

Revenue for the three months ended June 30 was down 27.0 per cent, at $16.8 million.

K-Green Trust, which invests in "green" infrastructure assets, saw net profit 10.3 per cent lower at $7.1 million for the six months ended June, while revenue dropped 19.5 per cent to $33.8 million.

Distribution per unit for the first half of the year remained stable at 3.13 cents, to be paid on August 15.

Refer to the P&L on pg 4/14 of latest financials. Big drop in Revenue mainly due to absence of Construction Revenue arising from the flue gas treatment upgrade (mentioned in pg 1/14)

[mkmk]

http://infopub.sgx.com/FileOpen/KGT_3Q_2...eID=259751

K-Green Trust FY13Q3 Results
1. Excluding construction revenue arising from the flue gas treatment upgrade following its completion last year, Group revenue for 9M 2013 remained stable at $50.8 million compared to 9M 2012.

2. Profit after tax for 9M 2013 was $10.9 million, contributing to earnings per unit (EPU) of 1.72 cents for the period. Excluding the contribution from the construction of the flue gas treatment upgrade last year, profit after tax was $0.2 million or 2.0% lower compared to 9M 2012.

3. Net asset value per unit as at 30 September 2013 was $0.99 compared to $1.02 as at 30 June 2013, due to the distribution payment of 3.13 cents on 15 August 2013.

4. Cash generated from operations was $36.7 million for 9M 2013.

[AlphaQuant]

Research piece from AmFraser

It will be interesting to see what the management of the trust does with concessions running down yet no new acquisitions...


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K‐GREEN TRUST
An insipid growth story. Q313 remains an unexci?ng quarter for KGreen
Trust (KGT). The only catalyst for growth, that is acquisi?ons,
remains nowhere in sight as we con?nue to witness KGT’s sliding net
asset value (NAV).
Results stable, yet uninspiring. KGT delivered revenue of S$17.1mil
and net profit of S$3.8mil in Q313, which are ‐1.7% and ‐4.2% lower
than our projec?ons respec?vely. Opera?on and maintenance
(O&M) income con?nued to form the bulk of overall revenue at
74.9%, with future increases remaining dependent on annual
adjustments of O&M and power tariffs to account for changes in
consumer price index and fuel price.
Inching towards its first concession expiry. KGT is now another step
closer to facing its first concession expiry on its Senoko Plant in 2024.
Remaining concession agreements for the Ulu Pandan Plant and Tuas
DBOO Plant are due for expiry in 2027 and 2034 respec?vely. We
understand that these concession agreements are unlikely to be
renewed.
Zero NAV the end‐game. We reiterate the declining NAV story of
KGT. KGT’s assets are recognized as service concession receivables,
that represents the right to receive fixed and determinable amounts
of payments from its customers NEA and PUB over the concession
period. Naturally, these service concession receivables will gradually
decline over ?me as KGT receives its payments. KGT’s NAV of 99c per
share represents an all‐?me low as at 30 Sep 2013.
Reiterate SELL. Since our ini?a?on on 15 Apr 2013, KGT is down 9%
and is currently trading at S$1.02. At current levels, we believe
investors have yet to fully price in the investment nega?ves of KGT.
With an unchanged fair value of S$0.78, we reiterate our SELL call on

[Nick]

I don't think acquisitions will solve anything. The business model is self liquidating ie no cash is being retained to replenish assets. Nothing right or wrong about such a model - growth (if any) will have to come from new equity eventually. Alternatively, just value it as a self liquidating fund (like any BOT project) and see what returns would entice an investor.

(Not Vested)

[Shrivathsa]

I have examined the case made by AmFraser on this.

http://sgx-stocks-sti.blogspot.sg/2014/0...trust.html

As I see it, I can see that there will be asset acquisition in the form of data centres etc funded internally.

I still maintain a call that it will be worth buying when it dips below NAV.

[Nick]

I thought it was Cityspring Trust that was acquiring and developing data centres ?

[Shrivathsa]

Cityspring is, but Keppel Infrastucture (K-Green) will have first right of refusal on http://www.kepcorp.com/en/content.aspx?s...astructure

[Shrivathsa]

Item 5, datahub

[butcher]

Keppel Infrastructure Trust ("KIT") formerly K-Green Trust have not made any acquisition since IPO, I am hoping it make yield accretive acquisition soon

[opmi]

Too late already. Chao Sng liao.


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