FCT – BT
FCT distributable income up 15%
Q1 gross revenue up 19.6%, with net property income surging 24%
FRASERS Centrepoint Trust (FCT) reported a distribution per unit of 1.91 cents for its first quarter ended Dec 31 2009, a 14.4 per cent increase from 1.67 cents for the corresponding period a year ago, in line with analysts’ estimates.
Its distributable income rose 15.1 per cent from $10.4 million to $12 million for the same periods.
The group’s gross revenue saw a 19.6 per cent gain from the same period in 2008 to $23.3 million, which in turn sent net property income for the quarter surging 24 per cent to $15.9 million, driven by improvement in revenue from the Northpoint enhancement works.
Property expenses for the quarter rose 10.6 per cent over the previous year’s to $7.4 million, mostly due to the increase in property tax.
‘FCT maintained strong operational momentum with portfolio occupancy rising to 98.6 per cent as Causeway Point registered full occupancy as at December 2009,’ said DMG & Partners Securities analyst, Jonathan Ng, in his report yesterday.
Mr Ng had maintained his ‘buy’ call on the stock with a target price of $1.66, implying a 5 per cent yield at fair value.
‘Rental renewals remained strong, with a total of 10 leases renewed at an average of 4 per cent increment above preceding rental rates. Occupancy costs in FCT’s malls remain healthy, with tenants at Causeway Point and Anchorpoint registering average occupancy costs of 13.4 per cent and 16.2 per cent respectively as at Nov 2009, well in line with market benchmarks,’ Mr Ng added.
For the quarter, net income rose 19.7 per cent from $8.4 million to $10.1 million.
The group’s total return after tax, however, surged 89.5 per cent from $5.8 million to $10.9 million, mainly because of a 90 per cent decrease in unrealised fair value losses in derivatives.
FCT’s proposed acquisition of Northpoint 2 and YewTee Point, approved during its extraordinary general meeting yesterday, and slated to be completed before July, will stand it in good stead, credit rating-wise, according to DMG’s Mr Ng.
‘Apart from the accretion FCT will enjoy from these acquisitions, we believe the injection of the two assets may improve FCT’s credit rating as its asset-concentration risks will substantially be reduced with income contributions from Causeway Point dropping from 64 per cent to 51 per cent,’ said Mr Ng.
FCT’s unit price fell 3 cents in trading yesterday, closing at $1.40.
FSL – BT
Q4 distribution per unit halves at First Ship Lease Trust
1.5 US cent payout unchanged from preceding quarter’s
FIRST Ship Lease Trust (FSLT) has declared a fourth-quarter distribution per unit (DPU) of 1.5 US cents, unchanged from that of the preceding quarter but down by half from 3.08 US cents a year ago. For the full year of 2009, DPU came to 7.9 US cents per unit, down nearly a third from the year before.
Q4’s distribution amount of US$9 million was 42 per cent lower while FY09 total distribution dropped by just over a quarter to US$42 million. The retained cash from the lower distribution payout was mainly used for voluntary debt prepayment as well as for scheduled loan amortisation following the credit facility amendment.
Net cash generated from operations grew 15 per cent to US$67.9 million for FY09 from US$59.1 million for FY08, due to the full-year impact of the acquisition of five vessels between April and October 2008. For Q4, net cash generated was flat at US$16.2 million.
‘2009 proved to be the most difficult year for the global shipping industry since the mid 1980s,’ said Philip Clausius, CEO of FSLT trustee-manager, FSL Trust Management.
‘2010, however, started on a significantly more positive note: major container liner companies, following various successful freight rate restoration efforts and capacity reductions, are at or close to cashflow breakeven levels; the tanker freight market is enjoying a mini-bull run with current rates at 12-month highs; the dry bulk market has come off somewhat but is still well above long-term historical averages,’ he added.
Lease revenue for Q409 fell 4.6 per cent from Q408 to US$24.5 million, mainly due to lower lease payments received from two vessels leased to Geden Lines. The Geden leases are pegged to the US dollar three-month Libor and reset on a quarterly basis and this has plunged compared to the previous year.
Looking ahead, FSLT expects its lease portfolio to continue to deliver predictable and stable cashflow. FSLTM has indicated that Q1FY10 DPU would remain at 1.5 US cents, representing an annualised yield of about 14 per cent based on yesterday’s closing price of 60 cents.
The distribution for Q4FY09 will be paid on March 1.
CMT – DBS
Refocusing on growth
• Results in line with estimates
• Pricing power returning, focus on delivering growth
• Maintain Buy, TP $2.03
Results meet market expectations. 4Q09 revenue of $140m was 4.2% higher yoy while NPI improved a higher 11.8% to $96m with cost savings from property and operating expenses. Distribution income rose a higher 25.5% to $76.5m with inclusion of $7m of profits and dividend from CRCT held back earlier. There was a small $26m of net revaluation deficit, largely coming from The Atrium, bringing full year writedown to $212.5m or book NAV of $1.54/unit.
Signs of stability emerging. The group renewed 971,191sf of NLA (c30% of total) in 2009 with rents at an average 2.3% higher than previous levels. However, more importantly, pricing power appears to be returning with lease reversion spreads in 2H09 higher than in 1H09. In addition, pedestrian footfalls have turned +ve in Dec 09 on a yoy basis while tenant gross turnover was 11.3% greater than in 3Q. We anticipate this uptrend to be sustained in 2010 on the back of economic recovery and greater tourist arrivals with the opening of the 2 IRs. Uplifting impact from completion of AEI in Raffles City and JEC should provide another earnings growth driver from 2011. CMT is well placed to tap accretive new acquisition/development opportunities as it remains one of the lowest geared retail Sreit with a leverage of 30.5%.
Maintain Buy, TP $2.03. The group is on track to deliver a 3-pronged growth strategy from both organic and inorganic means, particularly from FY11 onwards. Our estimates have not factored in any new acquisitions, which should provide further upside surprise when it materialises. The stock is trading at 5% FY10 and 5.1% FY11 yield. Maintain Buy with revised target price of $2.03.
a-iTrust – DBS
Reasons to stay invested
• Consistently strong performance
• Earnings spike to come in FY11 post completion of 2 of its new buildings
• Buy for growing yields, TP S$1.17
Stable operations. Gross revenues came in line with expectations at S$29.9m (+4% yoy, -2% yoy), contributed by higher rents, increase in energy billings from ITPB power plant, higher maintenance fees at ITPC and new contributions from a new multi-level car park in ITPB. Net property income (NPI) came in at S$19.3m (+13% yoy, +1% qoq), lifted by savings from successful cost management initiatives instituted in 2Q10. Distributable income came in at S$14.1m (-8% yoy, 0% qoq) translated to a DPU of 1.85 Scts.
Sustained occupancies, upside from development projects. Looking into FY11, a-itrust will be renewing c35% of its space, most of which are from the Vega and the Crest. Given that this is the first renewal cycle, we believe that tenants should remain at their existing locations. In addition, we look forward to a-itrust taking delivery of 2 out of 3 development projects in the later part of FY11, which will lead to positive earnings growth.
Adjusting INR assumptions. The strengthening of INR vs S$ exchange rates means that future hedges are likely to be in a-itrust favor. Therefore, we adjust our INR vs S$ estimates to INR 33.5 to S$1, in line with our DBS currency strategist’s outlook for INR in 2010 which is similar to the rate that the trust has hedged its next distribution payment.
BUY for growth, TP S$1.17. a-itrust’s DPU CAGR of 9% over FY11-12 remains a key attraction, prospective yield of 7.9-8.5%. Upside earnings surprise will hinge on potential acquisitions given a-itrust’s strong financial leverage position. Our target is adjusted to S$1.17 from higher earnings estimates and rolling forward our valuations.
PLife – Phillip
Full Year 2009 Results
• Full year revenue of $66.7 million, net property income of $61.9 million, distributable income of $46.7 million.
• 4Q09 DPU of 2.05 cents, bringing full year DPU to 7.74 cents.
• Property portfolio asset size increased 10%, backed by acquisition of 8 nursing homes in Japan
• Maintain buy recommendation with fair value of $1.56
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Results within expectations
Plife REIT reported full year revenue of $66.7 million (+23.7% y-y), net property income of $61.9 million (+23.1% y-y), distributable income of $46.7 million (+13.4% y-y). Full year DPU rose 13.3% to 7.74 cents. The results came in within our expectations (Gross revenue +2.8%, net property income +2.0%, distributable income +1.3%, DPU +1.3%). Revenue grew on the back of increased contribution from the inflation-linked rental from the Singapore hospitals as well as higher contribution from the Japan properties. Percentage revenue contribution from Singapore and Japan are 77% and 23% respectively, compared with 90% and 10% in 2008.
Portfolio asset value increased from $1,047.8 million in 2008 to $1,152.9 million in 2009. The portfolio consists of 3 Singapore hospitals and 18 Japan properties (17 nursing homes, 1 pharmaceutical products distribution facility) In the valuation as at 31st Dec 2009, the Singapore hospitals recorded 3.8% increase in valuations, while the Japan properties (excluding 8 nursing homes acquired in Nov 2009) recorded 6.5% decrease in valuations. For the full year, Plife recognized $28.9 million revaluation gain to its income statement.