Indonesia elections won't affect country's healthcare: First Reit
THE recent Indonesian presidential elections - where Jakarta governor Joko Widodo has as good as been declared victor over his rival Prabowo Subianto - is not expected to impact the healthcare industry or cause any drastic changes to healthcare policies in the short to medium term, First Reit said in its financial statement yesterday.
The healthcare Reit's largely Indonesian portfolio will thus continue to deliver strong performance, amid a concurrent rising demand for quality healthcare, it said.
It added, too, that its sponsor Lippo Karawaci's strong pipeline of 24 quality hospitals presents strong acquisition opportunities for the Reit. It will be on the lookout for yield-accretive acquisition opportunities in Singapore and other parts of Asia to expand its portfolio.
Besides 11 Indonesian assets (mostly hospitals), First Reit also owns Pacific Healthcare Nursing Homes at Bukit Merah and Bukit Panjang and The Lentor Residence, also a nursing home, at Yio Chu Kang. It also has Sarang Hospital, a rehabilitative and nursing facility in Yeosu City, South Korea.
The Reit yesterday announced a distribution per unit of two cents for its second quarter ended June 30, 2014, to be paid on Aug 29. This was higher than the 1.85 cents it paid out a year ago, and translates to a distribution yield of 6.7 per cent. It is also its highest DPU payout since its 2006 listing.
The Reit reported a 15.4 per cent increase in net property income to $22.7 million, on the back of a 14.5 per cent increase in gross revenue to $23 million. The revenue growth was contributed by Siloam Hospitals Bali and Siloam Hospitals TB Simatupang, acquired in May last year, and a partial maiden contribution from the newly acquired Siloam Hospitals Purwakarta in May 2014, it said.
Earnings per unit, however, more than halved to 2.33 cents in Q2, from 5.71 cents a year ago, but the Reit attributed this to dilution stemming from two factors: an issuance of new units to help finance its purchase of Siloam Hospitals Purwakarta, completed in May, and an issuance of new units to unitholders who elected to receive distributions in the form of fully-paid new units, starting January this year.
Its half-year net property income was $44.9 million, 22 per cent higher than a year ago, supported by a 20.9 per cent increase in gross revenue to $45.5 million.
Its units added half a cent to finish at $1.215 before its earnings were announced.
