Mapletree Logistic Trust’s Latest Earnings: Distribution Goes Up 2%

Yesterday, Mapletree Logistics Trust (SGX: M44U) released its first-quarter earnings report for the financial year ending 31 March 2017 (FY16/17).

Mapletree Logistics Trust is a real estate investment trust (REIT) that owns 127 logistics properties around Asia. You can learn more about the company here and here, or catch the third quarter’s earnings here.

Financial Highlights

Here’s a rundown on the REIT’s financial figures:

1. Gross revenue rose to S$89.6 million in the first-quarter, up 7.0% from the same quarter a year ago.

2. Net property income (NPI) rose by 4.2% year on year. For the first quarter, NPI came in at S$80.8 million.

3. Distribution per unit (DPU) for the reporting quarter was 1.887 cents, up 2% from a year ago.

4. Mapletree Logistics Trust’s portfolio had a book value of S$5.5 billion as of 30 June 2017. The REIT had a net asset value per unit of $1.02.

Beyond that, Foolish investors might also want to keep up an eye on the REIT’s debt profile. The debt profile may provide clues on how the REIT is funded and its sensitivity to the interest rate environment. This is summarised below:

Source: Mapletree Logistics Trust’s Earnings Presentation

The REIT’s total debt rose to $2.2 billion as of 30 June 2017. Aggregate leverage also rose to 39%. Mapletree Logistics Trust was able to keep its interest rate and coverage stable while lengthening its average debt duration.  

 Operational Highlights

Mapletree Logistics ended the quarter with an overall 95.5% portfolio occupancy, lower than the 96.3% recorded in the prior quarter. The REIT also had a weighted average lease term to expiry of about 3.9 years (by nett lettable area).  

Ms Ng Kiat, Chief Executive Officer of the Manager, summarised the quarter in a few words:

“We have kept momentum in this quarter to deliver continuing, steady growth in MLT’s [Mapletree Logistics Trust] DPU, underpinned by positive rental reversions and stable occupancy rates. With the bulk of the conversions of SUAs [single-user asset] to MTBs [multi-tenanted buildings] in Singapore behind us, Singapore’s operations are stabilising and have contributed to the quarter’s improved performance.”

The management sounded a more upbeat note looking ahead:

“As a portfolio, the Manager sees sustained leasing activities across its diversified markets….

In Singapore, the market continues to face pressure from the increase in supply of warehouse space. However, MLT’s operations are stabilising and the concentration of SUA lease expiries has been reduced. In Hong Kong, MLT’s portfolio continues to see healthy rental reversions due to limited supply. In Japan, the Manager has successfully renewed or replaced all four SUA leases due for expiry in FY17/18….

The Manager remains focused on proactive lease and asset management to maintain high occupancy rates. The Manager will also continue to pursue opportunities for strategic acquisitions and asset enhancements to improve the quality and specifications of MLT’s portfolio. The Manager maintains a disciplined and prudent approach to capital management.”

Foolish summary

Mapletree Logistics Trust last traded at $1.22 on Monday. This translates to a historical price-to-book ratio of under 1.20 and a distribution yield of around 6.1%.

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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 owns units in Mapletree Logistics Trust.