DBI’s FY-24 Funds From Operations Rise 11% as Capacity Expansion Advances

Steady Foundations in a Critical Coal Export Hub

Dalrymple Bay Infrastructure Limited (ASX, DBI) has released its June 2025 investor presentation, reaffirming its position as the operator of the world’s largest metallurgical coal export terminal. The Dalrymple Bay Terminal (DBT) serves as a vital gateway for Australian coal producers, particularly those in the Bowen Basin, linking them to global steelmaking supply chains.

DBI’s business model is anchored by take-or-pay contracts covering 84.2 million tonnes per annum (Mtpa) of terminal capacity, fully contracted through at least 2028 with options to renew. This arrangement ensures a predictable and stable revenue stream, insulated from volume fluctuations, and underpinned by a pricing agreement extending to 2031 that escalates charges with inflation.

Financial Performance and Distribution Growth

For the fiscal year 2024, DBI reported a solid 11.1% increase in funds from operations (FFO) to $156.7 million, alongside a 5.8% rise in distributions to 22.0 cents per security. EBITDA surged 7.1% to $279.8 million, reflecting the company’s high operating leverage and cost pass-through model. DBI targets distributing 60-80% of FFO, with guidance for FY25/26 distributions set at 24.5 cents per security, a 6.5% uplift, signaling confidence in ongoing cash flow growth.

Capital Investment Driving Future Revenue

DBI is actively investing in its infrastructure through the Non-Expansionary Capital Expenditure Program (NECAP), with $366 million committed to projects designed to enhance terminal efficiency and capacity. These investments are expected to increase the Terminal Infrastructure Charge (TIC) by approximately $0.60 per tonne by mid-2027, translating into incremental revenue of around $50 million annually. The NECAP program is funded through existing debt facilities and internal cash flow, maintaining DBI’s strong credit metrics.

8X Project, Expanding Capacity Amid Regulatory Clarity

Looking beyond NECAP, DBI is progressing the 8X Project, a phased capacity expansion within the existing terminal footprint that aims to raise contracted capacity to 99.1 Mtpa. The project has secured all primary environmental approvals and benefits from a Queensland Competition Authority (QCA) ruling that the expansion costs will be socialised across all customers. However, new access seekers will likely face higher charges than existing customers. With approximately 30 Mtpa of demand in the access queue, including 14.9 Mtpa under conditional agreements, DBI is exploring multiple financing options to support this growth.

Robust Balance Sheet and Risk Management

DBI maintains an investment-grade credit rating (BBB from S&P and Fitch) with a stable outlook, supported by a well-laddered debt maturity profile and strong liquidity. The company has effectively hedged foreign exchange risks by swapping all foreign currency debt back to Australian dollars and manages interest rate exposure through a mix of fixed-rate debt and interest rate swaps. This prudent financial management complements DBI’s low-risk, regulated revenue model.

Sustainability and Decarbonisation Initiatives

DBI is also advancing its environmental, social, and governance (ESG) agenda, focusing on decarbonisation pathways. The company is transitioning its site vehicle fleet to electric and hybrid models and has secured renewable energy arrangements for its terminal operations and corporate offices. While the majority of emissions are Scope 2 related to electricity use, DBI is exploring further abatement strategies to reduce onsite emissions over the medium to long term.