HWT – BT

Hyflux Water Trust posts $1.1m Q1 net

HYFLUX Water Trust (HWT), a pure-play global water business trust listed on the Singapore Exchange (SGX) last December, yesterday reported net earnings of $1.1 million for the first quarter ended March 31.

This came on the back of total revenue of $14.4 million, which represented 28 per cent of the trust’s FY2008 revenue projection. HWT announced a distribution per unit (DPU) of 0.87 cent for Q1. The trust expects to meet the forecast DPU of 2.09 cents for the first half. The forecast DPU for FY2008 is 4.88 cents. Earnings per unit for the quarter stood at 0.37 cent.

Eight plants in HWT’s portfolio of 13 achieved commercial operation during the quarter. Utilisation rates stood at around 51 per cent and the trust expects the rates to increase over time.

HWT has no gearing currently. ‘The global credit crunch, slowdown in the US economy and increasing uncertainties in the financial markets have seen tightening of credit from financial institutions and increasing cost of raising funds,’ said the trust in its financial statements.

Nevertheless, the trust has the ability to draw down on a US$66 million credit facility to fund future acquisitions.

According to Hyflux Water Trust Management CEO Saud Siddique, ‘the fundamentals of the water industry remain very positive, particularly in China’.

Mr Siddique added that the pipeline of projects under the ROFOAR (right of first refusal and right to match) arrangement with Hyflux Ltd positions the trust for further growth.

According to HWT’s website, Hyflux Ltd has granted Hyflux Water Trust Management ROFOAR on all water-related infrastructure assets owned by the group.

The ROFOAR pipeline assets saw a 45 per cent growth from last December to the end of April this year, from 760,000 to 1,105,000 cubic metres per day.

HWT shares ended trading yesterday at 75 cents, one cent down. DBS Vickers had issued a ‘buy’ call on the counter on April 4, with a target price of 78 cents.