Billion Dollar Club: BASIC MATERIALS

Keppel Infrastructure Trust has been named the overall sector winner for this industry sector, and has been rated tops in returns to shareholders over three years as well. The other winner in this industry sector is Sri Trang Gloves (Thailand), which led its sector peers in weighted return on equity (ROE) over the three years taken into consideration for this year’s Billion Dollar Club (BDC).

With some $8.7 billion worth of assets under management, Keppel Infrastructure Trust (KIT) is the largest infrastructure business trust listed in Singapore. Its portfolio comprises strategic businesses and assets in the three core segments of energy transition, environmental services, and distribution & storage. As described by KIT, these businesses and assets provide essential products and services across a broad range of industries; and generate regular and resilient cash flows, with potential for growth that is supported by favourable long-term market dynamics and demand. KIT’s long-term goal is to deliver sustainable and growing returns to unitholders through a combination of recurring distributions and capital appreciation. 

The portfolio includes essential local utilities providers such as City Energy, Keppel Merlimau Cogen, Senoko Waste-to-Energy Plant, SingSpring Desalination Plant. It includes also overseas assets such as Ixom in Australia and New Zealand, which provides specialised source water, water and wastewater treatment solutions; wind farms in Sweden, Norway and Germany.

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KIT’s business nature means it is able to weather the macro challenges such as inflationay pressures and fluctuating energy prices, and for its FY2024 ended Dec 31, 2024, it was able to report continued growth. “KIT’s diversified portfolio of businesses and assets providing essential services, and the trustee-manager’s commitment to long-term value creation and sustainability, have positioned us well to navigate these headwinds and maintain stability,” says chairman Daniel Cuthbert Ee Hock Huat in KIT’s FY2024 annual report.

In FY2024, KIT achieved record funds from operations of $277.8 million, up 8.6% y-o-y. KIT attributes the improvement to steady cash flows from its growing portfolio of high-quality infrastructure assets. In the same year, KIT generated $200.6 million in distributable income and delivered a distribution per unit (DPU) of 3.9 cents, thanks to contributions from new acquisitions and the resumption of distribution from the Keppel Merlimau Cogen Plant.

Sri Trang Gloves (Thailand), winner of the best weighted ROE in this industry sector, is from Thailand but has a secondary listing on the Singapore Exchange. From its first factory at Hat Yai in 1989, it has grown its scale rapidly to 13 production facilities, producing 51 billion pieces of rubber gloves per year, exported to more than 175 countries, literally all over the world. This kind of scale makes Sri Trang the largest glove maker in Thailand and among the world’s top three.

The company describes the most recent FY2024 as another year “full of challenges in business operations and competition in the industry”. Even so, it remains committed to improving its efficiency so that it can continue to grow and do so in a sustainable manner.  For the year, it reported record earnings of THB995.3 million ($39.4 million), a surge of 551.9% y-o-y, led by similar new record in sales volume. 

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