Month: October 2009
FSL – CNA
FSL Trust’s DPU down 51% to 1.5 US cents
Mainboard-listed First Ship Lease Trust (FSL Trust) announced on Friday, a 1.5 US cent distribution per unit (DPU) for the third quarter ended in September.
The figure is 51 per cent lower than the 3.05 US cent DPU for the same period last year.
The amount to be distributed is US$7.96 million – an on-year drop of 48 per cent.
Going forward, FSL Trust said that its business is robust and its portfolio of lease contracts will continue to deliver predictable and stable cash flows.
FCOT – CNA
Frasers Commercial’s DPU & distributable income fall on-year
Frasers Commercial Trust (FCOT) announced on Friday a third quarter distribution per unit of 0.2 cent.
That is 26 per cent lower than the 0.27 cent DPU for the same period last year, after making adjustments for a rights issue.
Distributable income for the period ended in September fell by 24 per cent on-year to S$6.14 million, though it was up by 10.4 per cent when compared to the previous quarter.
Net property income suffered a less drastic drop, declining 0.6 per cent on-year to S$19.9 million. Compared to the previous quarter, FCOT said its net property income increased by over 13 per cent.
The improvement was driven by the initial five weeks of ownership of Alexandra Technopark, a stronger Australian dollar and better occupancy levels.
FCOT said the last stage of its recapitalisation and refinancing will be completed in the next quarter.
Earlier this year, it announced a rights issue to raise S$214 million.
CMT – JPM
3Q09 results above expectation, AEI to restart
• CMT announced 3Q09 results, DPU of S$0.0235/unit, annualizing 5.4% yield. The trust retained 3.2% of its distributable income for 4Q09. Distributable income YTD hit S$213million, 4% ahead of our estimates and consensus estimates on the back of better than expected rental income. We have therefore raised our DPU estimates by 4 – 5% for 2009 – 2011. Stock will trade ex-3Q09 distribution on 28 Oct 09.
• Raffles City AEI announced. The trust re-started its AEI program after putting it on hold for a year. Management intends to create a new underground link at basement 2 of Raffles City and to reconfigure its basement 1. CMT planned to spend a total of S$33mil capex targeting 8% ROI for this AEI, and we estimate a 1% accretion to CMT’s FY11 DPU. In addition, the trust is in the process of planning for a complete refurbishment of Jurong Entertainment Centre (JEC), and we expect a detailed plan, including required capex, to be announced in 4Q09.
• Short term volatility expected. With CapitaLand undergoing its proposed restructuring of its shopping mall business, we believe CMT’s share price is likely to remain volatile in the short run, especially as investors make up their mind to the specific risk/return profile they are seeking. We believe, however, that CMT will remain as the liquid proxy for Singapore retail real estate, offering a stable return profile. In addition, with its portfolio size now at S$7bn, the trust has the capacity to take on small development projects, and we would watch out for the upcoming tender (10th Nov 09) for Clementi Mall, a semi-completed suburban mall at the Clementi Bus Interchange.
• We reiterate our OW rating, and raise our Dec-10 DDM based price target to S$2.00/unit. Key risks to our rating and price target include a worse than expected rental reversion and long term rent growth; or a
re-tightening of the credit market.
MLT – JPM
3Q09 results – flat-lining – ALERT
• Mapletree announced 3Q09 results, with DPU of S$0.0148/unit, flat Q/Q but higher than J.P. Morgan estimates on the back of tax savings as a result of government tax rebates in Malaysia and China. Gearing for the trust as of 30 Sep 09 is 38.1%, book value stood at S$0.88/unit. Stock will trade ex-3Q09 distribution on 28 Oct 09.
• Operations still under pressure: Net property income declined 3.5% Q/Q as a result of depreciation of the HK$ and Rmb, an increase in vacancy rates in Hong Kong and China assets, and a pre-termination of a lease in Singapore. The occupancy rate declined 1.2% Q/Q, with the average reversion rate flat compared to previous prevailing rentals due to the trust’s priority in retaining tenants. We expect 4Q09 results to flat-line at best.
• No change to trust’s strategy: Management reiterated its “yield +growth” strategy during the conference call and indicated that it was in an advance stage of evaluating accretive third-party acquisition opportunities in Singapore, Japan, and Hong Kong. Funding for potential acquisitions will still be through a mix of debt and equity. In addition, management highlighted that approximately S$300 million of the sponsor’s development pipeline has been completed or is nearing completion, and the trust will tap into the pipeline when appropriate.
• Management execution is the key to share price performance: The trust has this year moved to a “new strategy”, in which management will try to bundle acquisitions together with permanent/stable funding structure being put in place at the same time. While we believe this is the right shift in strategy for MLT, it is difficult in execution given the much smaller deal size for logistic assets. A demonstration of a good execution of equity fund raisings together with yield-accretive acquisitions would be necessary, in our view, before the stock could rerate. We therefore maintain our Neutral rating on the stock.
FirstREIT – BT
First Reit Q3 DPU falls to 1.90 cents
FIRST Real Estate Investment Trust (First Reit) reported third-quarter distributable income of $5.22 million, versus $5.26 million a year earlier, its manager Bowsprit Capital Corporation said yesterday.
Distribution per unit (DPU) for Q3 to Sept 30 was 1.90 cents, compared with 1.92 cents in the previous corresponding period.
Based on First Reit’s closing price of $0.715 on Oct 20, and annualised DPU of 7.62 cents, yield was healthy at 10.7 per cent for Q3, Bowsprit said.
The healthcare Reit’s gross revenue and net property income remained stable at $7.6 million and $7.5 million respectively.
Bowsprit chief executive Ronnie Tan said: ‘We have seen stronger occupancy at our three Indonesians hospitals, as more patients stayed back to seek medical care instead of travelling abroad.
‘Continuing growth in this sector will provide an upside potential for First Reit as our Indonesian assets enjoy a variable rental growth component in addition to annual escalation.’
In Singapore, demand for private nursing care continues to grow steadily as the population ages, Mr Tan said.
First Reit said that its balance sheet remains strong and its gearing of 15.6 per cent is significantly lower than the regulatory limit of 35 per cent.
The Reit has received approval from the authorities for asset enhancement works at its Adam Road Hospital, expected to start soon. Extension works are also proposed at Lentor Residence.
‘First Reit will continue its ongoing review of the financial attractiveness of various projects in the pipeline, such as the Tech-Link healthcare logistics and distribution centre in Singapore that received temporary occupation permit on Sept 2, 2009,’ Bowsprit said.