The subdued market reaction suggests that Keppel Infrastructure Trust's (SGX:A7RU) recent earnings didn't contain any surprises. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.

See our latest analysis for Keppel Infrastructure Trust

SGX:A7RU Earnings and Revenue History February 10th 2025

In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. As it happens, Keppel Infrastructure Trust issued 8.1% more new shares over the last year. That means its earnings are split among a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. Check out Keppel Infrastructure Trust's historical EPS growth by clicking on this link.

How Is Dilution Impacting Keppel Infrastructure Trust's Earnings Per Share (EPS)?

Unfortunately, Keppel Infrastructure Trust's profit is down 14% per year over three years. And even focusing only on the last twelve months, we see profit is down 75%. Like a sack of potatoes thrown from a delivery truck, EPS fell harder, down 77% in the same period. Therefore, the dilution is having a noteworthy influence on shareholder returns.

In the long term, if Keppel Infrastructure Trust's earnings per share can increase, then the share price should too. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Keppel Infrastructure Trust's Profit Performance

Keppel Infrastructure Trust issued shares during the year, and that means its EPS performance lags its net income growth. Therefore, it seems possible to us that Keppel Infrastructure Trust's true underlying earnings power is actually less than its statutory profit. In further bad news, its earnings per share decreased in the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. When we did our research, we found 4 warning signs for Keppel Infrastructure Trust (3 are a bit unpleasant!) that we believe deserve your full attention.

This note has only looked at a single factor that sheds light on the nature of Keppel Infrastructure Trust's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.