Month: October 2009
PST – BT
PST’s Q3 distributable income surges 60%
PACIFIC Shipping Trust (PST) achieved a 60 per cent surge in distributable income to US$6.9 million for the third quarter ended Sept 30, 2009, up from US$4.3 million a year ago.
This came on the back of a 39 per cent jump in gross revenue to US$15.6 million.
Distribution per unit (DPU) for the three months fell to 0.818 US cents from 1.0953 US cents due mainly to the implementation of PST’s revised distribution policy to encourage prudence amid the credit crunch, as well as an increase in the number of issued units. In absolute terms, the amount of US$4.8 million to be distributed is up 30 per cent year on year.
The jump in gross revenue was mainly contributed by charter hire from the vessels CSAV Laja and CSAV Lauca. In line with better revenue, net cash generated from operations grew 17 per cent to US$13.5 million.
Net profit more than doubled to US$7 million from US$3.2 million, partly as a result of the adoption of hedge accounting on Oct 1, 2008 and the repayment of loans from the proceeds of the preferential offering in Q3 FY2008.
‘With the improving global economic outlook, we envisage opportunities to enter into asset acquisitions. By increasing our cash balance through income retention, PST should be well-positioned to explore value-accretive expansion opportunities, while maintaining its prudent financial management strategy. This strategic growth plan will translate into sustainable rewards for our unitholders in the long term,’ said Alvin Cheng, CEO of PST trustee-manager PST Management (PSTM).
In the preceding quarter ended June 30, 2009, PSTM announced that it was revising distribution policy to strengthen its cash position in anticipation of favourable investment opportunities arising in the next 12 to 18 months, while indicating then that the distribution for this quarter would not be less than 70 per cent of PST’s available distributable income. Looking ahead, management will review its distribution policy depending on prevailing market conditions.
‘As a conservatively geared shipping trust with no immediate refinancing needs or pressing financial obligations, PST is building up its cash reserves to equip ourselves with the financial flexibility to seize value-accretive opportunities that we believe will emerge along with the gradual economic recovery,’ said Mr Cheng.
The books’ closure date is Oct 30 and payment will be made on Nov 26.
a-iTrust
a-iTrust posts 3% climb in Q2 distributable income
ASCENDAS India Trust (a-iTrust) yesterday reported distributable income of $14.1 million for the second quarter ended Sept 30, up 3 per cent from $13.8 million a year ago.
Distribution per unit (DPU) for the three months rose to 1.85 cents, from the previous corresponding quarter’s 1.82 cents.
The trust, which owns business space in India, said that total property income for the quarter rose 2 per cent to $30.4 million, ‘despite the difficult business environment globally’.
Income held up as the trust was able to sustained an average occupancy of 97 per cent, or 98 per cent including committed leases.
Total property expenses, on the other hand, fell 20 per cent to $11.2 million on the back of lower operating, maintenance and security charges as a result of cost management (such as repackaging and retendering of contracts); and lower utilities expenses as the price of oil remained lower than a year ago. As a result, second-quarter net property income rose 22 per cent year-on-year to $19.2 million.
Gearing was 13 per cent as at Sept 30, 2009, compared with 9 per cent as at March 31, 2009. The increase was due to the additional borrowings taken to fund development projects.
Looking ahead, a-iTrust said that its performance will continue to be influenced by the performance of its tenants as well as conditions in the local property market.
‘a-iTrust’s net property income continued to grow despite the global downturn, because of the resilient demand for its properties and cost management,’ it said in a filing.
‘While the economic recovery remains fragile and uncertain, we will focus on what we can control – enhancing the competitive edge of our properties, strengthening relationships with our tenants, maintaining cost discipline, and seeking opportunities to invest in future growth.’
MLT – BT
MapletreeLog looking to buy assets in Asia
MAPLETREE Logistics Trust (MapletreeLog) is in advanced talks to buy assets in Asia, as its business outlook improves.
MAPLETREE Logistics Trust (MapletreeLog) is in advanced talks to buy assets in Asia, as its business outlook improves.
It said this yesterday as it reported a net property income of $44.1 million for the third quarter ended Sept 30 – 9.5 per cent higher than a year ago.
‘We are in a position to consider some growth in line with our ‘yield plus growth’ strategy,’ said Chua Tiow Chye, CEO of trust manager Mapletree Logistics Trust Management. ‘With less competition from buyers in the region, we believe sellers will be less demanding in terms of asking prices and cap rates for disposing of their properties.’
For instance, MapletreeLog believes that deals commanding a capitalisation rate of about 9 per cent in Singapore are possible.
It emphasised that the acquisitions will be accretive, and will not lead to significant movement in its gearing. It will fund purchases through a mix of debt and equity, and capital from any equity fund-raising exercise will not go towards recapitalisation.
As at Sept 30, MapletreeLog’s aggregate leverage ratio was 38.1 per cent, slightly higher than the 37.8 per cent three months previously. It says it faces no refinancing risk this year; it has $19 million of working capital loans due for renewal in Q4, which can be covered by committed revolving credit facilities.
MapletreeLog’s amount distributable in Q3 was $28.8 million, reflecting an increase of 13.2 per cent over the same period last year.
Nevertheless, available distribution per unit (DPU) fell because of the larger unit base from a rights issue in August last year. The DPU in Q3 was 1.48 cents, 19.6 per cent less than the 1.84 cents a year ago.
Adjusting for the rights issue, the proforma DPU in Q3 last year would have been 1.31 cents, translating to a year-on-year growth of 13 per cent.
The occupancy rate across MapletreeLog’s portfolio dipped from 98.3 per cent in June to 97.1 per cent as at Sept 30. But ‘while the environment remains challenging, we expect pressure on occupancy and rental rates to ease a little with the improving outlook’, said Mr Chua.
The counter closed unchanged yesterday at 75 cents.
CMT – BT
CMT’s Q3 distributable income jumps 23.3%
Unitholders will receive the Q3 distribution of 2.35cents on Nov26
CAPITAMALL Trust (CMT) yesterday posted a net property income of $94.5 million for the third quarter ended Sept 30. This is 8.8 per cent more than a year ago.
Higher net property income was driven by an increase in gross revenue, from the purchase of The Atrium@Orchard and the completion of asset enhancement works at Sembawang Shopping Centre.
Distributable income rose 23.3 per cent from last year to $74.9 million.
Despite the higher earnings, CMT’s distribution per unit (DPU) in Q3 was 2.35 cents – down 35.4 per cent from the 3.64 cents a year ago. This reflects the larger unit base from a rights issue early this year.
Adjusting for the rights issue, the DPU in Q3 last year would have been 1.91 cents. This would have translated to a 23 per cent year-on-year growth.
Unitholders will receive the Q3 distribution of 2.35 cents on Nov 26. On an annualised basis, the DPU is 9.32 cents, representing an annualised yield of 5.27 per cent based on the closing unit price of $1.77 on Wednesday.
Notwithstanding the economic slowdown, CMT managed to record positive rental reversions from January to September. Across its portfolio, rental rates have risen 1.8 per cent over preceding rates typically committed three years ago.
CMT’s portfolio occupancy rate as at Sept 30 was 99.6 per cent, just 0.1 percentage point lower than nine months ago.
‘Recent economic data indicate that the worst may be over,’ said chairman of trust manager CapitaMall Trust Management, James Koh. ‘With the clear but modest recovery, we expect retail sales in the upcoming months to be supported by festive spending.’
CMT, together with CapitaCommercial Trust, will start on asset enhancement works at Raffles City in Q4 2009. The initiative will cost $33.23 million, and is expected to contribute positively to CMT’s income when works are completed in Q4 2010.
Preparation for asset enhancement works at Jurong Entertainment Centre is also on track, CMT said.
The counter lost four cents yesterday to close at $1.73.
MLT – DBS
Attractive yields
At a Glance
• In line with ours, above consensus
• Stable portfolio occupancies
• Maintain BUY, TP S$0.83, offering a total return of 18% backed by stable FY09-10F DPU yields of 8%.
Comment on Results
Stable 3Q09. Mapletree Logistics Trust (MLT) reported 3Q09 results that were in line with expectations. Gross revenues and net property income (NPI) increased by 10.3% and 9.5% to S$50.8m and 44.1m respectively, as a result of a larger portfolio. Distributable income came in at 28.8m (+13% yoy), translating to a DPU of 1.48 Scts. On a q-o-q basis, performance remained stable.
Occupancy levels at 97%. Occupancy levels held up pretty well, which were slightly above our estimates of 96%. Looking ahead, with only 4% of their revenues up for renewal in 2H09, we expect occupancy levels to remain stable – we have tweaked our occupancy assumptions for FY09 slightly upwards, which increase our FY09-10F DPU estimates slightly 2%.
Selectively acquisition. The manager of MLT emphasizes that while they are considering potential targets, they will only likely go ahead with the acquisitions, only if they are accretive and value enhancing to the portfolio. Also, these acquisitions should not be overleveraging its balance sheet, which, in our view, is reassuring to investors of management’s cautious and prudent approach towards growing its portfolio.
Recommendation
Buy for stable yields, TP S$0.83. We believe that MLT, trading at 0.8x P/BV, offering with a prospective forward FY09-10F DPU yield of 7.8% remains attractive. Maintain BUY, TP S$0.83 on the on the back of higher earnings estimates and lower WACC of 6.6% compared to 7%. Upside surprises will stem from MLT acquiring properties from market/sponsor.