First Real Estate Investment Trust’s Latest Earnings: What Investors Should Know

First Real Estate Investment Trust (SGX: AW9U) released its fiscal first quarter earnings report yesterday. The reporting period was from 1 January 2015 to 31 March 2015.

First REIT is a healthcare-focused real estate investment trust (REIT). It has a portfolio of 16 properties with 12 located in Indonesia, three in Singapore, and one in South Korea. Its sponsor is Indonesia’s largest listed property company, PT Lippo Karawaci Tbk.

You can read more about the REIT in here and here.

Financial highlights

Here’s a rundown on First REIT’s latest set of financial figures:

  1. Gross revenue rose to $24.7 million in the first quarter, up about 10% from the same quarter a year ago.
  2. Consequently, net property income (NPI) for the quarter also rose by 9.3% year–on-year to $24.2 million; it was $22.2 million a year ago.
  3. Distribution per unit (DPU) for the reporting quarter will be 2.06 cents, a 3.5% increase from the 1.99 cents seen in the first quarter last year.
  4. First REIT’s total investment portfolio value stands at around $1.2 billion at the moment and it ended the quarter with a net asset value per unit of $1.02, up from S$0.965 a year ago.

Foolish investors might also want to keep an eye on a REIT’s debt profile. The debt profile may provide clues on how a REIT is funded, and its sensitivity to the interest rate environment. The latest summary on these for First REIT was from 31 December 2014.

Gearing Ratio 33.1%
Fixed/hedged 100%
Total Debt $401.3 million

Source: First REIT’s earnings report

Operational highlights

Dr Ronnie Tan, Chief Executive Officer of First REIT’s manager, commented on the quarter’s results:

“First REIT delivered another record DPU for the quarter supported by the maiden contribution from the new high-quality hospital in Indonesia, Siloam Sriwijaya, acquired in December 2014, as well as step-up rental income from existing properties. Going forward, the Trust will continue to look at yield-accretive acquisitions to boost our distribution and sustain our growth”

Over the next few years, the REIT is planning asset enhancement initiatives for three properties, namely: Siloam Hospitals Surabaya, Siloam Hospitals Kebon Jeruk and Imperial Aryaduta Hotel & Country Club.

Foolish summary

First REIT last traded at S$1.42 on Tuesday. This translates to a historical price-to-book ratio of 1.39 and a distribution yield of around 5.7% (based on the REIT’s distributions over the last 12 months).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.