DALRYMPLE BAY INFRASTRUCTURE LIMITED (DBI)
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17/06/2025

1

Buy

$4.20

-12.50%

Citi explains the mismatch between inflation-linked revenue and longer-dated debt costs as yield curves have risen, i.e. higher yields further out on the bond duration for Dalrymple Bay Infrastructure.

Despite the mismatch, the analyst forecasts distributions can continue to rise despite a decline in net profit after tax, as higher interest costs are included in estimates with hedging rolling off. Citi expects the cost of debt to rise to 8% from 5.6%, resulting in lower EPS estimates for FY26–FY28.

Positively, the necessary capital expenditure (NECAP) will rise, which will lift revenue and permit distributions to continue to rise.

Brookfield is also divesting around 22.3% of Dalrymple at a discount of -7.9%, which is just under half of its holding. Post the trade, it will remain the largest shareholder at around 26.25%.

Target price rises to $4.20 from $4.15. Buy rating retained.

FORECAST
Citi forecasts a full year FY25 dividend of 24.00 cents and EPS of 19.40 cents.
Citi forecasts a full year FY26 dividend of 24.90 cents and EPS of 17.20 cents.