FRASERS Logistics & Commercial Trust : BUOU 0% (FLCT) posted a distribution per unit (DPU) of S$0.0352 for the second half ended September, down 6.6 per cent from S$0.0377 in H2 FY2022.

This was mainly due to lower income and higher expenses compared to the year prior, said the real estate investment trust’s (Reit) manager on Thursday (Nov 2).

FLCT’s revenue for H2 fell 0.8 per cent on the year to S$212.8 million from S$214.5 million previously.

Net property income was down 4.9 per cent to S$157.1 million from S$165.2 million the previous year. 

Adjusted net property income – which excludes straight lining adjustments for rental income and adding lease payments of right-of-use assets – was down 4 per cent year on year to S$155.5 million as opposed to S$162.1 million in H2 of FY2022.

The fall across topline figures was mainly attributed to weaker exchange rates of the Australian dollar versus the Singapore dollar, coupled with a decline in revenue and lower average occupancies at Maxis Business Park and 357 Collins Street.

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Property operating expenses rose 13 per cent over the half-year period to S$55.7 million from S$49.3 million in H2 FY2022 because of higher energy and utility expenses.

These were however partially offset by the full six-month effect of the acquisition of four properties in Australia in H2 FY2022, as well as a full six-month contribution from the practical completion of the two logistics and industrial properties in the UK.

Finance costs widened 29.7 per cent to S$25 million from S$19.3 million as a result of higher interest rates and additional borrowings drawn.

As a result, distributable income for H2 fell 5.8 per cent to S$131.6 million versus S$139.6 million in the previous year.

This brings FLCT’s DPU for the full year to S$0.0704, representing a 7.6 per cent decline from S$0.0762 in FY2022.

Anthea Lee, chief executive of the manager, said: “Operating in the current economic climate remains challenging, as continued uncertainty around long-term rates and translation impact of our foreign-sourced income placed pressure on FLCT’s financial performance in FY2023.”

FLCT’s portfolio occupancy as at end-September stood at 96 per cent, with a portfolio weighted average lease expiry of 4.3 years.

Net asset value per unit was S$1.17, down from S$1.30 in FY2022.

The Reit’s aggregate leverage stood at 30.2 per cent, with a weighted average debt maturity of 2.2 years and an interest coverage ratio of 7.1 times.

Looking ahead, the Reit manager said it will maintain its efforts in improving occupancy for FLCT’s commercial assets. It will also continue to work on cost-optimisation initiatives, while remaining vigilant on the movement of energy prices. 

The manager also said it will evaluate appropriate hedging strategies for energy contracts to mitigate the impact on its operating expenses.

Units of FLCT rose 3.85 per cent or S$0.04 to close at S$1.08 on Thursday.