Keppel DC REIT reported FY 2023 results with DPU of 9.383 cents. In comparison to FY 2022, the DPU dropped by 8.1%!
The year-over-year declines primarily resulted from increased finance costs (up 56.1%) and provisions for uncollected rental income from the Guangdong Data Centres.
Additionally, there were reduced net contributions from certain Singapore colocation assets due to higher facility expenses (up 46.3%) and less favorable foreign exchange hedges.
What helped to lighten the higher expenses?
The elevated expenditures were partially mitigated by favorable reversions and escalations, contributions from acquisitions completed in FY2022, increased finance income (+18.1%), and tax savings.
Other Crucial Metrics
Aggregate leverage: 37.4%
Interest coverage ratio: 4.7 times for FY 2023
Average cost of debt: 3.3%, with 74% of borrowings fixed through interest rate swaps
Debt profile: Bulk of debt expiring in 2026 and beyond.
Remarks from Manager: Forecast foreign sourced distributions have been substantially hedged till end December 2024, and progressively hedged till end June 2025.
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