DBI Projects 6.5% Distribution Rise Amid Terminal Charge Hike
Dalrymple Bay Infrastructure Limited forecasts a 3.6% increase in terminal charges and a 6.5% uplift in distributions for the 2025/26 financial year, confirming steady growth and full terminal capacity.
- Terminal Infrastructure Charge forecast at $3.72 per tonne, up 3.6%
- Distribution guidance raised to 24.5 cents per stapled security, a 6.5% increase
- Q1-25 distribution confirmed at 5.875 cents per security
- Terminal fully contracted at 84.2 million tonnes per annum through 2028
- NECAP charge increase driven by $30.4 million additional capital expenditure
Terminal Charges and Capacity
Dalrymple Bay Infrastructure Limited (DBI) has announced its Terminal Infrastructure Charge (TIC) forecast for the upcoming financial year 2025/26 (TY-25/26), setting it at approximately $3.72 per tonne. This represents a 3.6% increase compared to the previous year, driven primarily by an indexed base TIC aligned with Australia's Consumer Price Index and a higher NECAP charge reflecting recent capital investments. The Dalrymple Bay Terminal (DBT), a critical export gateway for Australian metallurgical coal, remains fully contracted at 84.2 million tonnes per annum on a 100% take-or-pay basis through to June 2028, underscoring the terminal's strategic importance and stable revenue stream.
Distribution Guidance and Investor Returns
Alongside the TIC update, DBI has raised its distribution guidance for TY-25/26 to 24.5 cents per stapled security, marking a 6.5% uplift from the 23.0 cents per security forecast for the prior year. This increase aligns with DBI’s reaffirmed target of 3-7% annual distribution growth, subject to market conditions and board approval. The distributions will be paid quarterly, comprising both dividends and partial repayments of loan notes embedded within the stapled securities structure. The company also confirmed its Q1-25 distribution at 5.875 cents per security, consistent with previous guidance, with payments scheduled for June 2025.
Capital Expenditure and Regulatory Factors
The rise in the NECAP charge component of the TIC to approximately $0.20 per tonne reflects an additional $30.4 million in non-expansionary capital expenditure, which will be added to the asset base from July 2025. This investment is expected to sustain operational efficiency and support the terminal’s capacity commitments. Meanwhile, the Queensland Competition Authority’s levy remains negligible for the upcoming year. While the base TIC is final, the NECAP charge and QCA levy are still subject to final regulatory determination, which could slightly adjust the forecast TIC.
Strategic Outlook
DBI’s stable contract book and planned capital investments position the company well to continue delivering steady cash flows and distribution growth. The Dalrymple Bay Terminal’s role as the world’s largest metallurgical coal export facility ensures it remains a vital link in the global steelmaking supply chain. Investors can expect DBI to maintain its disciplined distribution policy, targeting 60-80% payout of funds from operations, while balancing reinvestment needs and market dynamics.
Bottom Line?
DBI’s forecast growth in charges and distributions signals confidence but hinges on final regulatory approvals and market conditions.
Questions in the middle?
- How will final NECAP and QCA fee determinations impact the Terminal Infrastructure Charge?
- What are the potential risks to DBI’s full contract capacity beyond 2028?
- How might global coal demand fluctuations affect DBI’s future distribution growth targets?
