Keppel DC (AJBU) H2 2023 earnings summary

Executive summary

• FY23 distributable income was $167.7m and DPU was 9.383 cents, down from 10.214 cents in FY22; lower income reflected higher finance costs and Guangdong DC loss allowances.

• Portfolio occupancy was 98.3% and WALE was 7.6 years by lettable area at 31 Dec 2023; aggregate leverage was 37.4%.

Financial highlights

• FY23 gross revenue was $277.3m, down from $281.2m; net property income was $245.0m, down from $252.5m.

• FY23 property expenses rose to $36.3m from $24.8m, while finance costs increased to $48.5m from $31.1m.

• FY23 finance income was $10.9m, up from $9.3m; distributable income fell to $167.7m from $184.9m and DPU to 9.383 cents from 10.214 cents.

• Guangdong DC uncollected rental and coupon income, net of recoveries, reduced FY23 DPU by 0.649 cents; the loss allowance covered ~5.5 months.

Outlook and guidance

• Management plans to pursue data-centre growth and strengthen global presence; more than $2b of assets under development and management through Keppel and its private funds are identified as potential acquisition opportunities.

• Keppel T&T granted a right of first refusal for future acquisition opportunities involving its data-centre assets.

• Forecast foreign-sourced distributions were substantially hedged through Dec 2024; in Jan 2024, additional portions were progressively hedged through Jun 2025.