Month: October 2008
AscottREIT – BT
Ascott Reit’s DPU up 31% in Q3
ASCOTT Residence Trust (ART) achieved a unitholders’ distribution of $15.86 million for the third quarter ended Sept 30, a 32 per cent increase year-on-year. Distribution per unit (DPU) for the quarter is 2.61 cents, a 31 per cent increase from a year earlier.
Lim Jit Poh, chairman of Reit manager Ascott Residence Trust Management Ltd (ARTML), said: ‘Ascott Reit posted a strong operating performance. Revenue increased $10.7 million. Sixty-six per cent was attributable to organic growth across the portfolio. The other 34 per cent was contributed by newly acquired properties subsequent to Q3 2007.’
ARTML chief executive Chong Kee Hiong said ART continued to benefit from geographic diversification and its extended-stay business model. Its properties in Beijing enjoyed strong growth in average daily rates during the Olympic Games. And its Australian and Singapore properties also performed well.
As at Sept 30, ART’s gearing was 34.9 per cent – well within the 60 per cent gearing limit allowable under MAS’s property fund guidelines.
The trust’s average cost of debt was 3.3 per cent, and its interest cover a healthy 5.1 times. ARTML said that more than 70 per cent of ART’s debt is on a fixed-rate basis, as it has consistently taken a conservative approach to capital management.
Some $84.6 million or 15 per cent of total debt is due for refinancing in the current Q4. The trust said it has sufficient cash and bank facilities to meet these refinancing needs. More than 80 per cent of total debt is not due for refinancing until 2011 and beyond.
‘We will continue to focus on active management of our properties to maximise asset yields to deliver stable returns to unitholders, despite the difficult economic conditions,’ Mr Lim said.
PST – BT
Pacific Ship Trust’s revenue up 29%, DPU flat in Q3
PACIFIC Ship Trust (PST) maintained a steady course in the third quarter, lifting gross revenue 29 per cent to US$11.2 million from US$8.7 million but keeping distribution per unit (DPU) flat at 1.0953 US cents.
The higher gross revenue came on a full quarter’s contribution from the vessel Kota Naga, which was delivered and commenced charter on May 28, and 14 days’ time charter income from the vessel CSAV Laja, which commenced charter on Sept 16.
Net profit after tax rose to US$3.2 million from US$589,000, mainly due to higher revenue and a reduction in fair-value losses on interest rate swaps.
Other expenses – professional and regulatory fees, vessel tonnage tax, advertising and administrative costs – rose US$300,000, related mainly to the acquisition and charter of four new vessels. Finance expenses increased from US$6.4 million to US$7.5 million.
Since the first quarter of FY2008, PST has retained 10 per cent of distributable income for use as working capital. As such, Q3 distributable income was US$3.71 million, almost unchanged from US$3.67 million previously.
DPU for the nine months ended Sept 30 was 3.1553 US cents, slightly lower than 3.19 US cents previously, as distributable income eased to US$10.7 million from US$10.8 million.
‘PST enjoyed a strong Q3 performance despite volatile market conditions,’ said Alvin Cheng, CEO of trustee-manager PST Management. ‘We will endeavour to pursue sustainable returns for unitholders by maintaining a prudent risk management and yield accretive growth strategy.’
PST units closed unchanged at 24.5 US cents yesterday.
Frasers CT – BT
By WONG WEI KONG
Frasers Centrepoint Trust (FCT) has announced distribution per unit (DPU) of 2.05 Singapore cents for its fourth quarter ended Sept 30 2008, an increase of 23 per cent from the same period last year, said manager Frasers Centrepoint Asset Management Ltd (FCAM).
Full year 2008 DPU rose 11 per cent to 7.29 cents.
Said chief executive of FCAM Christopher Tang: ‘FY2008 capped a successful year for FCT as we deliver another consecutive year of sustained growth’.
Strong performance at Causeway Point and excellent results at the reinvigorated Anchorpoint continued to drive gross revenue and net property income growth, according to FCT.
Fourth quarter gross revenue grew 11 per cent to S$22.1 million while net property income increased 10 per cent to S$14.1 million. FY2008 gross revenue and net property income were similarly up 9 per cent to S$84.7 million and S$56.6 million, respectively.
Rentals at Causeway Point were renewed at 15 per cent above preceding rates in Q408, reflecting the continued strong demand as well as tight supply situation in the suburban retail sector.
Anchorpoint’s Q408 gross revenues more than tripled to S$2.4 million from the year before, as rents increased over 40 per cent while the mall reverted to full occupancy after the completion of enhancement work.
Overall portfolio occupancy declined to 87.7 per cent as at 30 September 2008 from 94.6 per cent a year ago as a result of planned vacancy associated with enhancement work at Northpoint.
FCT said it has a conservative gearing level of 28.1 per cent and no refinancing pressures, It has no material refinancing and interest rate risks as its term loan amounting to S$260 million only expires in July 2011, and its associated interest rate is fully hedged.
The asset enhancement works at Northpoint is on schedule for completion by June next year, it said. Rentals at Northpoint are projected to increase 20 per cent to S$13.20 per square foot per month, translating to a 30 per cent increase in net property income to S$18.0 million. With close to 90 per cent of Northpoint’s post enhancement net lettable area already committed, Northpoint is set to provide a substantial boost to FCT’s income from the second half of FY2009 onwards.
CMT – CIMB
Rough times ahead
• Performance on track. 3Q08 results were in line with Street and our expectations. DPU of 3.64cts for the quarter grew 7.1% yoy to form 26.3% of our forecast of 13.9cts for FY08. This excludes S$1.6m of revenue received from CRCT which has been retained for distribution in 4Q08. Gross revenue of S$129.7m was up 13.3% yoy on new contributions from Atrium@Orchard and the completion of various asset enhancement initiatives (AEI) in various malls. YTD DPU forms 76.8% of our full-year estimate, in line. Additionally, management remains committed to distributing the S$5.5m retained in 1Q08 in 4Q08.
• AEI and acquisition updates. Management revealed that planned AEI initiatives for Jurong Entertainment Centre, Funan DigitaLife Mall and Tampines Mall have been put on hold due to high construction costs although AEI for Atrium@Orchard and its integration with Plaza Singapura are expected to proceed on track, subject to official approval.
• Changes to assumptions. CMT has performed well thus far despite weakening global economic conditions. Nonetheless, a deepening global and domestic recession is expected to weaken rental reversion possibilities going forward while the global credit crunch will make debt availability for new acquisitions difficult. On this, we remove our earlier forecasts of acquisitions for Ion Orchard, Clark Quay and Vista Xchange, and drop our rental growth forecasts to 0-2% for FY09 and -10% for FY10, down from 3-15% growth expectations earlier. We also forecast a 1% drop in occupancy by 2010 for downtown malls which would be facing more competition from new supplies. Separately, we increase our associate contribution forecasts on strong YTD performances and higher cost of debt assumptions for FY09 onwards by 70bp.
• Downgrade to Underperform from Neutral; lower target price of S$1.90 (from S$3.64). Following the above various adjustments, our DPU estimate for FY08 increases by 3%, while our FY09-10 estimates decrease by 5-25%. Accordingly, our DDM-derived target price (discount rate 9.7%) drops to S$1.50 from S$3.64. Downgrade to Underperform in view of a weakening macroeconomic outlook.
MapleTree – DBS
Resilient Earnings
Story: Gross revenues and NPI grew 19.6% and 18.7% yoy to S$46.0m and 40.2m respectively. Main drivers were contributions from an enlarged portfolio; 18 properties were bought through the course of the year. Distribution income also increased 33% to $25.4m, translating to a DPU of 1.84cts. DPU, however was 9.8% down sequentially due to diluted from the rights issue completed in Aug’08. YTD, DPU of 5.78 cts was 85% of our projected FY08 estimate. The outperformance came from MLT keeping interest costs low at an average effective rate of 2.7% and interest savings from the repayment of loans.
Point: Faced with slowing global trade moving forward, the focus of MLT will be (i) yield optimization from its existing portfolio and (ii) tenant retention. While we expect slowing economic activity to affect demand for logistics space, we view that any impact from falling occupancies to be mitigated as 61% of its leases are locked in longterm basis with incorporated stepped up rentals clauses. Going forward, we adjust our occupancy assumptions slightly downwards to 95% in FY09-10. With lower occupancies and no further acquisitions assumptions, our DPU estimate over FY09 is adjusted down by 8.9% to 5.4 cts.
Relevance: We have lowered our TP to S$0.57 from S$1.04 previously due to the exclusion of any acquisition assumptions. We continue to like MLT for stable income stream with potential for upside when it executes on its acquisition pipeline going forward. At current price level, MLT offers an attractive fully diluted FY09-10 DPU yield of c.11% and 18% upside to our target price. Maintain BUY