CitySpring – BT

CitySpring Q4 DPU 6.7% higher than forecast

CITYSPRING Infrastructure Trust has beaten projections with its performance for the fourth quarter ended March 31, 2008.

It has declared a distribution per unit (DPU) of 1.6 cents for Q4 FY2008, 6.7 per cent or 0.1 cent above the projected DPU provided at the time of its IPO in February 2007.

Cash earnings of $20.35 million were also 90 per cent higher than projected, CitySpring said. It defined cash earnings as the aggregate of profit before income tax adjusted for non-cash income and expenses and lease receivable repayment, after deduction of capital expenditure and before principal repayment of debt incurred for the period.

From Jan 5, 2007 to March 31, 2008, cash income was $69.2 million against projection of $49.7 million, while DPU for the period was 7.08 cents compared with a forecast 6.78 cents.

According to trust manager CitySpring Infrastructure Management, the trust’s initial assets – City Gas Trust and SingSpring Trust – performed better than projected during the last quarter of the financial year.

For example, City Gas posted higher cash earnings of $4.53 million, up from the projected $1 million, while SingSpring reported cash income of $2.9 million, up from the $1.55 million forecast.

‘The healthy performance by City Gas was underpinned by increased town gas sales. SingSpring Trust continued to meet the desalinated water production requirements of the Public Utilities Board during the quarter,’ the trust manager said in a statement.

As for its Australian subsidiary Basslink, Q4 cash income dipped to $5 million from a forecast $6.18 million, due to an unplanned outage and lower risk sharing payments.

However, Basslink has been fully available since the outage on Dec 31 last year, and CitySpring expects the facility fee deduction of A$1.1 million in Q4 FY2008 to be recovered in the current year.

Basslink is the electricity interconnector linking Tasmania to mainland Australia, which CitySpring bought for A$1.175 billion (S$1.54 billion) last year.

Part of the funds came from a bridge loan, which CitySpring said will be refinanced through a $370 million three-year term loan from DBS Bank.

CitySpring Infrastructure Management CEO Au Yeung Fai said in a statement: ‘Taking a loan at the CitySpring level will enable us to further optimise our capital structure, and shows our commitment to enhance unitholder value.’

Distributions after the completion of the refinancing, which will include Basslink’s cashflows, will be raised to 7 cents for the year ending March 31, 2009.

At a briefing, CFO Tong Yew Heng said the infrastructure outlook in Singapore and elsewhere remains positive, and the firm is actively reviewing a number of investment opportunities.

Some 49 per cent of the possible deals are from China and Hong Kong, while 35 per cent are from South-east Asia. In sector terms, toll roads/tunnel take up 32 per cent, while power accounts for 28 per cent. The rest is taken up by ports, water, logistics and others.

Mr Tong commented that CitySpring is ‘in intensive talks with some parties . . . and we will be disappointed if we don’t announce something in the next 12 months’.