HYflux Water Trust 1Q10 results weak, revenues fell 57% to $6.1m due to absence of EPC sales resulting in 80% plunge in net profit to a mere $1.2m. Distributable income of 1.16¢ per unit is down 19% qoq & below market estimates. Weak water treatment demand at industrial parks compunded by one-off seasonal factors. US$66m credit facility expiring in Feb 11, refinancing may carry higher interest spreads. Mgmt ruled out any acqusistions in near term.
The DPU support from sponsor has ended & with no kicker in sight, it will be difficult for HWT to sustain its 5.42¢ paid out in FY09. Likely to pay out 4.6-4.8¢ in FY10 translating to DPU yield of ~7%.
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