Mapletree Log Trust Q1 profit drops 58% as hedges' fair values fall; DPU stays at S$0.0185

MAPLETREE Logistics Trust's first-quarter net return for unitholders dropped 57.9 per cent to S$21.5 million in its fiscal first quarter on a loss in the fair value of financial hedging instruments.

But the Asia-focused warehouse real estate investment trust (Reit) posted a 5.7 per cent increase in net property income, to S$75.2 million in the three months ended June 30, and maintained its distribution per unit at 1.85 Singapore cents.

The Reit's bottom line suffered a hit from a S$17.2 million net decrease in the fair value of financial derivatives, comprising mainly of interest rate swaps, cross-currency swaps and currency forwards that the Reit uses to hedge certain financial risk exposures. Accounting rules require changes in the fair value of those contracts to be recognised in the trust's total return, although there is no impact to the distributable amount. About 30 per cent of the Reit's distributable income for fiscal 2017 is hedged into Singapore dollars, while a further 40 per cent are derived in Singdollars.

Amount distributable to unitholders had a modest increase of 0.4 per cent during the quarter, to S$46 million.