FCT posts 48.7% drop in Q2 DPU on enlarged base, retained earnings

Published Thu, Apr 23, 2020 · 12:46 AM

FRASERS Centrepoint Trust (FCT) on Thursday posted a second-quarter distribution per unit (DPU) of 1.61 Singapore cents, down 48.7 per cent from 3.137 cents a year ago.

This was attributable to an enlarged unitholders base and higher amount of distributable income retained during the quarter, the manager said.

Unitholders can expect to received their DPU on May 29, after books closure on May 4.

For the three months ended March 31, income available for distribution rose 25 per cent to S$36 million from S$28.8 million a year earlier, due mainly to contributions from FCT's 24.8 per cent interest in PGIM Real Estate Asia Retail Fund (PGIM ARF), and its 40 per cent stake in Sapphire Star Trust (SST). The distribution from PGIM ARF was S$6 million and the amount from SST was S$3.8 million.

In view of the uncertainty brought about by the Covid-19 situation, the manager has adopted a "prudent approach" to retain about 50 per cent of the income available for distribution this quarter, bringing the distribution to unitholders to S$18 million, it said.

Gross revenue rose 0.9 per cent to S$50.2 million, from S$49.7 million on gross rent increase from renewals and step up rents from existing leases.

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Net property income came in at S$36 million, down 1.3 per cent from S$36.4 million a year ago, as growth in property expense outpaced revenue growth during the quarter, the manager noted.

As at March 31, FCT's gearing level stood at 37.4 per cent. The increase in the gearing from last quarter was due mainly to the drawdown of S$80 million from its revolving credit facility on March 27, to repay a S$90 million medium-term note due on April 3. Post repayment, FCT's gearing is 33.3 per cent.

Portfolio occupancy as at March 31 is 96.1 per cent, compared with 96 per cent a year ago.

Said Richard Ng, chief executive of the manager: "Our tenants are experiencing tough trading conditions as shopper traffic and tenants' sales at our properties have been severely affected due to the Covid-19 outbreak. FCT, together with Frasers Property Retail rolled out our tenant support package (TSP) on Feb 26, 2020 and a S$45 million enhancement to the TSP on March 27, to help our tenants meet immediate cash-flow challenges and to provide rental relief and support over the next few months.

"We will continue to monitor the Covid-19 situation and take appropriate measures to help FCT navigate through this difficult period."

The manager added that the detriment from Covid-19, regulatory measures imposed during the "circuit-breaker" period and provisions for rental rebates will have a "significant impact" on FCT's revenue, income available for distribution and cash flow for the remainder of financial year 2020.

FCT units closed at S$2.10 on Wednesday, down S$0.01 or 0.5 per cent.

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