PST – BT
Pacific Shipping Trust Q4 DPU up 6% to 1.1 US cents
PACIFIC Shipping Trust (PST) will be distributing 1.1 US cents per unit for the fourth quarter of 2007.
This is 6 per cent higher than the 1.04 US cents distributed for the corresponding quarter in 2006.
Based on its initial public offering price of US$0.45 per unit, the distribution per unit (DPU) amounted to an annualised yield of 9.7 per cent, said PST. The yield came to 10.6 per cent based on the closing price of US$0.41 of PST units on Jan 21.
The rise in the DPU came on the back of higher income distribution for the fourth quarter ended Dec 31, 2007, which amounted to US$3.7 million, compared with US$3.52 million a year ago.
The Q4 2007 distribution will bring full-year income distribution to US$14.5 million, which represents 100 per cent of PST’s distributable amount as set out in its IPO prospectus. The amount is net of repayment of a loan principal.
Net profit for Q4 2007 totalled US$1.6 million compared with US$3.4 million in Q4 2006. The decrease was due to fair value losses in interest rate swaps (entered into to fix the cost of borrowings) which have no impact on the distributable income.
The net profit was achieved on gross revenue of US$8.7 million from the charter of PST’s existing portfolio of vessels and interest income.
Said Subhangshu Dutt, CEO of PST Management, the trustee-manager of PST: ‘For the past six quarters, we have consistently exceeded our IPO projections and we are reasonably confident of maintaining this performance in 2008.’
‘Our four new vessels coming on stream this year are expected to raise PST’s total contracted revenue per annum by 79 per cent. We hope to continue improving on our performance in the coming years with further quality acquisitions.’
Last year, PST announced the acquisition of four vessels which will expand its current portfolio by 50 per cent to 12.
PST’s current fleet comprises eight vessels valued at US$287 million as at December 2007. The valuation, carried out by an independent ship broker, was 15 per cent higher than their book value and nearly 6 per cent above the vessels’ total purchase price.
The latest distribution of 1.10 cents will be made on Feb 29. Unit-holders do not have to pay Singapore tax on the distributable income.
PST is the first business trust listed on the Singapore Exchange. It provides shipping companies with financing and leasing structures that enable them to expand their fleet without straining their capital.
CMT – BT
CMT Q4 income rises to $62m
CAPITAMALL Trust (CMT) yesterday posted distributable income of $62.27 million for the fourth quarter of last year, 19 per cent higher than the preceding corresponding quarter’s $52.33 million. Full-year distributable income rose 24.7 per cent to $211.19 million.
And the trust’s manager is forecasting a 9.5 per cent growth in distributable income for this year to $231.3 million.
The trust committed $168.6 million total capital expenditure for asset enhancements across eight retail properties last year, and is projecting further capex of $153.2 million this year and $112.3 million next year.
The higher distributable income for the year ended Dec 31, 2007, was on the back of a 30.2 per cent increase in gross revenue to $431.86 million – due mainly to a full-year’s contribution from CMT’s 40 per cent stake in Raffles City acquired on Sept 1, 2006, as well as contributions from the three malls in the CapitaRetail Singapore portfolio. Other malls also accounted for higher revenue due mainly to new and renewed leases at higher rates as well as higher revenue from major asset enhancement initiatives at IMM Building.
As CMT completed an equity fund raising exercise on Nov 6 last year, its latest payout to unit holders will be for the period of Nov 7 to Dec 31 of 2007. The distribution per unit (DPU) of 2.34 cents works out to an annualised figure of 15.53 cents, translating to a 5.8 per cent distribution yield based on CMT’s closing price of $2.66 yesterday.
The counter ended one cent higher yesterday after plunging to a 52-week low of $2.50 in early morning trade. CMT’s unit price has lost 38.4 per cent from its 52-week high of $4.32 reached in May last year on the back of the stock market slide. Nonetheless, since its inception in 2002, CMT has achieved an average annual DPU growth of 12.8 per cent.
CMT’s portfolio valuation increased $200 million within eight months to $5.8 billion, resulting in net asset value per unit rising from $1.87 as at Dec 31, 2006 to $2.21 as at Dec 31, 2007.
‘Going forward, with a a strong capital structure and relatively low gearing of 34.7 per cent, we are well-positioned to capture yield-accretive opportunities presented in the market and are on track to achieve our local target asset size of $8 billion by 2010,’ said CapitaMall Trust Management Ltd’s CEO Pua Seck Guan.
The $8 billion target size is based on a secured pipeline of malls in parent CapitaLand’s portfolio – ION Orchard (50 per cent stake), Clarke Quay and the mall in the one north precinct.
Mr Pua is also optimistic about growth prospects for Singapore retail rents, pointing out that unlike residential and office rents, they have yet to surpass the last high in 1996/1997.
As well, prime Singapore retail rents are about 20-30 per cent of New York’s and 40-50 per cent of Hong Kong’s.
New attractions like the Integrated Resorts and F1, as well as population growth have been resulting in an influx of new international retailers into Singapore, which will provide depth to the local retail market, he noted.
CMTML’s 13.90-cent DPU forecast for full-year 2008 compares with 13.34 cents for full-year 2007.
CMT – DBS
Stability amid turmoil
Comment on Results
• CMT reported FY07 results in line with estimates. Revenue and NPI grew by 30.2% and 32.2% y-o-y to S$431.9m and S$287.8m respectively. This was mainly due to full
contributions from the Raffles City acquisition as well as buyback of CRS assets from 1 June 07. As an indication of organic growth, comparison of 4Q06 asset base into 4Q07 reflects revenue increase of 5.2%.
• FY07 DPU of 13.34 cents was registered, translating to 5% yield. This includes S$4.6m capital
distribution which was previously retained in 1Q07 to manage cashflows for AEI initiatives.
• CMT’s gearing has reached 34%. Interest cover remains healthy at 5.3x, and average cost of debt remains stable at 3.2%.
Recommendation
• Despite strong sponsorship from CapitaLand and consistently delivering value through AEI initiatives which backs our Buy recommendation for CMT; we believe concerns over a lack of
liquidity from debt and equity markets to fund acquisitions (which could lead to possible muted AUM growth) has led to negative sentiment for the S-REIT sector and CMT.
• However with current c.34% leverage, CMT is still able to achieve its targeted S$7bn AUM by 2009 (S$8bn by 2010) by funding acquisitions fully by debt while maintaining leverage levels
around targeted 45%. Sponsor pipeline remains visible with the line of ION Orchard, Clarke Quay and One North assets.
• We derive our DCF-based target price of S$4.05 for CMT after paring down acquisition assumptions.
FirstREIT – ML
FY07 results
FY07 Results
First REIT has reported FY07 results with DPU of 6.73cps, which is 5.7% higher than IPO forecasts and in line with ML estimates. DPU growth is attributable to organic growth from the Indonesian portfolio together with income contribution from the Singapore assets which were purchased in 2007.
4 MOUs signed for China assets
During 2007 First REIT signed MOUs for 4 China assets which comprise a combined total of 1290 beds. We expect First REIT will be able to transact on at least one MOU in 1H08. We are positive on First REIT’s push to regionally diversify the existing healthcare portfolio.
Positive asset revaluation
First REIT has revalued its underlying portfolio during the period, which has resulted in a valuation uplift of S$92mn vs purchase price. The stock is now trading at a 24% discount to revalued NAV of S$0.95/share. Portfolio size now stands at S$326mn.
Maintain Buy, PO S$0.84
We maintain our Buy rating and 12 month price objective of S$0.84/share. As one of only two Singapore listed Healthcare REITs, we believe First REIT has access to a wide range of Healthcare related assets both in Singapore and regionally. We have updated our earnings estimate to reflect the FY07 results.
First Reit – SGX
- Q4 net property income exceeds forecast by 18.6% with the addition of four new healthcare properties
- Full-year DPU of 6.73 Singapore cents translates to distribution yield of 9.0% – one of the highest amoung Singapore REITs
- Portfolio expansion to continue with China MOUs