Mapletree Logistics Trust posts 0.1% rise in Q1 DPU to S$0.02271
THE manager of Mapletree Logistics Trust (MLT) reported a distribution per unit of S$0.02271 for the first quarter of financial year 2023 and 2024, up just 0.1 per cent from a DPU of S$0.02268 for the same period a year ago.
The amount distributable to unitholders rose 3.1 per cent year-on-year to S$112 million from S$108.6 million. The increase was due to a higher divestment gain and capital gain tax write-back, said the manager in a bourse filing on Tuesday (Jul 25).
However, weaker exchange rates had partially offset the gains in distributable income. The impact of weakening currencies was partially mitigated through the use of foreign currency forward contracts to hedge the foreign-sourced income.
Weaker exchange rates, in particular the depreciation of the yuan, the yen, the won and the Australian dollar against the Singapore dollar, was also a factor behind the drop in net property income and gross revenue.
Net property income declined 3.1 per cent to S$158.1 million in the quarter ended Jun 30, compared with S$163.2 million a year ago.
Gross revenue also dropped 2.9 per cent to S$182.2 million from S$187.7 million over the same period.
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However, the decline was mitigated by better performance in Singapore and contributions from recent acquisitions in Japan and South Korea, though this was partly offset by weaker performance in China.
Ng Kiat, chief executive officer of MLT’s manger, said that real estate investment trust continues to experience the impact of weaker currencies and higher borrowing costs.
“However, the improved quality and resilience of our portfolio have continued to provide stability to our results. Given the economic uncertainty, our focus is to maintain portfolio stability, while continuing our efforts to rejuvenate the portfolio towards high-specs, modern assets,” she added.
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As at Jun 30, MLT has 193 assets in its portfolio totalling a book value of S$13.5 billion. Portfolio occupancy rate was 97.1 per cent in Q1, while 94 per cent of leases due for expiry (totalling 312,500 square metres of space) in the quarter were renewed or replaced, translating to a weight average lease expiry of 3.1 years.
The portfolio also recorded positive rental reversions of about 4.2 per cent, led by assets in Singapore, Japan and Vietnam.
The manager said that the global economic outlook remains subdued against a backdrop of elevated interest rates, slowing growth and geopolitical uncertainty.
While MLT’s overall portfolio occupancy is expected to remain stable, rental growth may moderate amid the economic slowdown.
“High borrowing costs, a strong Singapore dollar and slower than expected economic recovery in China will continue to weigh on MLT’s financial performance in the near term,” the manager said.
To mitigate these headwinds, approximately 82 per cent of MLT’s total debt has been hedged into fixed rates, while around 79 per cent of its income stream for the next 12 months has been hedged into Singapore dollar.
As at Jun 30, 2023, MLT’s total debt out of its total equity, otherwise known as the gearing ratio, stood at 39.5 per cent. Gearing ratio is a measure of a company’s financial leverage. Its average debt duration is 3.8 years.
The manager said it will continue to “pursue opportunities for selective divestments, asset enhancements and DPU-accretive acquisitions to strengthen its portfolio”.
MLT will pay a balance distribution of 2.037 Singapore cents per unit to unitholders on Sep 19 for the period from Apr 11, which is when new units were issued pursuant to the private placement launched between March and June this year.
Units of MLT rose 0.6 per cent or S$0.01 to close at S$1.71 on Tuesday.
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