GLOBAL Logistic Properties (GLP) reported on Friday that its net profit for the fiscal second quarter ended Sept 30, 2015 grew 27.4 per cent from a year ago to about US$114 million.
The results were driven by growth in China, development gains in Japan, GLP's entry into the US market and the absence of forex losses compared to the prior year. During the quarter, Japan earnings were up on the back of higher development gains. However, China earnings fell due to lower development completions. China earnings excluding revaluations were up 27 per cent year-on-year.
The group recorded 1.8 million square meters (sqm) of new and expansion leases in Q2, up 51 per cent year-on-year.
GLP's bottomline was also boosted by one-off non-operating costs recognised and lower net finance costs, which helped offset the higher non-controlling interests' share of results in GLP China.
Revenue, however, slipped 1.9 per cent to US$189.3 million. The decrease was mainly attributable to the GLP Brazil Income Partners II portfolio being 100 per cent consolidated in the prior period and subsequently syndicated to 40 per cent equity interests.
Revenue was also affected by the sale of 9 properties in September 2014 and 5 properties in September 2015 in Japan to GLP J-REIT and the weakening of the Japanese Yen against the U.S. Dollar. Average rates also fell by 18 per cent. These were partially offset by the completion and stabilisation of development projects in China, with increasing rents and inclusion of management fee income from GLP US Income Partners I.
During the quarter, the group's share of results of joint ventures increased by 76.9 per cent to US$34.3 million from US$19.4 million. The increase was mainly due to the inclusion of GLP US Income Partners I, completions of development activities of certain logistics facilities in Japan. It also saw gains in its share of fair value from investment properties (net of income tax) from China, Japan and US joint ventures.
For the first-half of FY2016, GLP's fund management revenue increased 51 per cent from a year ago to US$74 million. This consists of asset and property management fees of US$45 million and development and acquisition fees of US$29 million from about US$17 billion of invested capital.
Total fund management Asset Under Management was US$27 billion on Sept 30, up 107 per cent year-on-year. This is expected to grow to US$32 billion upon the inclusion of the US$4.55 billion US logistics portfolio. GLP expects to complete the acquisition from Industrial Income Trust by Nov 5, 2015 and pare down its stake to 10 per cent by April 2016