a-iTrust – CNA
Ascendas India Trust to pay 2.05 S’pore cents per unit for Q1
SINGAPORE: Singapore-listed Ascendas India Trust said it will pay 2.05 cents per unit for its fiscal first quarter. This was up 25 per cent over the same period a year ago.
All in, its first quarter distributable income to unit holders came to S$15.7 million. The rise was on the back of a 15 per cent increase in net property income to S$18.3 million for the three months ended June.
The manager of the trust said a key contributor to the results was the growth in property income despite the difficult business environment.
It added that income grew on the back of high occupancy rates and resilient rental rates.
Looking ahead, the property trust said it will continue to focus on retaining tenants, containing costs and seeking opportunities to invest in future growth.
However, it said its performance is tied to the performance of its tenants and demand for office space in Bangalore, Chennai and Hyderabad.
Cambridge – CIMB
Above expectations
• DPU above expectation. 2Q09 results are in line with consensus forecast but 6% above our expectation mainly due to amortised loan transaction costs that were added back into distributable income. Distribution of S$10.7m (-13.8% yoy) and DPU of 1.35cts (-13.8% yoy) form 31% of our FY09 forecasts. 1H09 DPU of 2.64cts represents 60% of our full-year forecast. The yoy decrease in distribution can be traced to higher management fees paid in cash and higher borrowing costs. Net property income of S$16m was flat (-0.3% qoq), while portfolio occupancy was stable at 99.5% (+0.3% pt qoq) as at Jun 09.
• Assets devalued by 9%. In 2Q09, the manager commissioned a full valuation of CREIT’s assets, with a 9% fall in asset value to S$880.3m. This was mainly due to higher cap rates and lower rents used by the valuers. After the valuation, asset leverage rose to 43.8% from 39.9%, while NAV/unit decreased to S$0.62 from S$0.73cts. Management anticipates flat valuation by the end of the year.
• Private placement of S$28m diluted DPU by 8%. On 27 Jul, management announced a private placement of 71.1m units to raise gross proceeds of S$28m. This represented 9% of the units in issue as at 31 Dec 08. Assuming no other changes, DPU would be diluted by 8%. About 23% of the privately placed units will go to its sponsors NAB (19%) and Oxley (4%). Units issued to NAB and Oxley will be priced at S$ 0.399/unit, based on the adjusted volume-weighted average price (VWAP) of units for the full market day on 24 Jul 09. Units issued to other investors will be priced at S$0.392, a 5% discount to VWAP.
• Changes to our estimates. We reduce our rental decline assumptions for CREIT in FY09 to -2% (from -5%), in view of the stable performance in 1H09. Additionally, we adjust the number of units to factor in the private placement, and add back the amortised loan transaction cost to distributable income. The net result for our FY09- 11 DPU forecasts is an upgrade of 12-18%.
• Maintain Outperform; higher target price of S$0.52 (from S$0.48). Our target price rises in tandem with our increased DPU forecasts to S$0.52 (from S$0.48), still based on DDM-valuation (discount rate 9.4%). We maintain our Outperform rating given its share-price upside potential and forward yields of 12%.
StarHill Gbl – CNA
Starhill Global REIT’s Q2 distribution per unit up 6.7% on-year
Singapore-listed Starhill Global Reit, which owns stakes in Wisma Atria and Ngee Ann City, said Wednesday its distribution per unit for the second quarter rose 6.7 per cent year-on-year to 1.9 Singapore cents.
Net property income for the three months to June climbed 16.4 per cent to S$27 million, mainly due to higher rates achieved for office renewals and new leases in Singapore, as well as higher revenue from its Chengdu property in China.
The property trust said occupancy for retail space in both Wisma Atria and Ngee Ann City remained high at around 98 per cent in the quarter.
Occupancy for office space in the two properties meanwhile were above 90 per cent.
Starhill said it will continue to concentrate on tenant retention and sustaining the appeal of its retail properties in terms of trade mix and offerings.
It added that managing financing cost remain a key objective.
PST – BT
Distribution cut only a guidance: PST
Plan is to use additional funds for possible acquisitions
PACIFIC Shipping Trust (PST) became the latest to jump on the bandwagon as it warned last week in its second-quarter results release that it may cut distributions for the third quarter.
However, its management hastened to add in a post-results briefing that the possibility of a distribution per unit (DPU) cut from 90 per cent to 70 per cent of distributable income was only a guidance.
Even if there is a cut, PST’s plan is to use the additional funds for possible acquisitions rather than for debt reduction as, unlike peers in the shipping trust sector, it has virtually no short-term debt. It also does not have any newbuilds on order, putting it in a good position to take advantage of low prices to purchase assets for future expansion.
PST has been saying since earlier this year that it is taking its time to look for yield-accretive acquisitions at good valuations in the chemical tanker and offshore supply sectors to diversify its income base. CEO Alvin Cheng said at the briefing that he will be looking more closely at acquisitions and has a planning horizon of 12 to 24 months.
PST is focusing on small to medium size vessels in the US$20 million to US$25 million range as the trust does not believe in the viability of extremely large sizes, Mr Cheng added.
The anchor handling tug and supply vessel (AHTS) market in particular holds the possibility of good bargains, PST believes. It is known that many small and medium size AHTSs were built speculatively over the past year and could now be on the market at attractive prices as their owners face a credit squeeze under current conditions.
‘We see hope of recovery in the next six to 12 months and we will position ourselves to capture some of the opportunities,’ said Mr Cheng.
On the flip side, however, the acquisition trail may lead PST into deeper waters than it has projected. ‘While no guidance is given on whether the distribution policy will be maintained at 70 per cent going forward, we do not rule out the possibility that the trust may further reduce payout ratio should the need arise to fund acquisitions,’ said UOB-KayHian in a research report released on Monday.
‘That said, we view this positively as ship prices have fallen sharply from their peaks in 2008. Accretive acquisitions may drive a re-rating of the stock,’ UOB-KayHian added as it maintained its ‘buy’ rating with a target price of 37 US cents.
PST units closed half a US cent higher at 26.5 US cents yesterday.