HWT – BT

Hyflux Water Trust posts $6.9m distributable cash

H1 figure is up 53% from before, translating to a DPU of 2.56cents

HYFLUX Water Trust yesterday reported distributable cash of $6.9 million for the first half of this year, up 53 per cent from first-half 2008.

This translates to distribution per unit (DPU) of 2.56 cents, except for units held by the trust’s sponsor, water treatment company Hyflux. Distribution per sponsor unit was partially waived to 1.77 cents to meet the trust’s projected interim DPU of 2.56 cents.

This is 18 per cent above the 2.17 cents distributed for H1 2008 and represents a yield of 3.9 per cent based on yesterday’s closing unit price of 65 cents. The trust distributes cash to its unit-holders every six months.

For the six months ended June 30, the trust’s total revenue fell 33 per cent to $20.7 million, from $31 million in H1 2008. Net operating income rose 72 per cent to $5.7 million for the half-year, yielding an after-tax profit of $5.1 million, 56 per cent up from a year back.

Q2 revenue fell 60 per cent year-on-year to $6.6 million, and the trust posted an after-tax loss of $1.2 million, versus a net profit of $2.2 million the year before.

The drop in revenue was due mainly to a 95 per cent drop in construction revenue to $0.6 million, as the construction of several plants was completed. Operating and maintenance and finance income grew 80 per cent to $6.1 million in Q2 2009 ended June 30.

Driven by stronger operating revenue, net operating income rose 27 per cent year-on-year to $2.7 million. ‘Unrealised foreign exchange losses from the revaluation of inter-company balances’ led to the $1.2 million net loss.

The trust’s cash and cash equivalents rose 20 per cent from end-March to $38.6 million at June 30, as operating activity generated more cash than was used to finance activities.

Gary Kee, chief executive of the trustee-manager, said: ‘Considering the very challenging economic environment, we are very pleased that Hyflux Water Trust has stayed resilient and met its distribution forecast for this half-year.’

The global water sector’s overall medium to long-term outlook remains strong, especially in China, the trustee-manager said.

Hyflux Water Trust, whose portfolio consists of 18 water plants operating under long-term concession agreements, said volume throughput rose marginally in Q2 from Q1 and is expected to remain resilient in H2.

It believes that it is on track to deliver projected DPU of 2.86 cents for the second half, which will mean a full-year DPU of 5.42 cents.