10 Things to Know About Keppel DC REIT’s Latest Earnings

Keppel DC REIT (SGX: AJBU) is the first pure-play data centre real estate investment trust (REIT) listed in Asia. Its sponsor is Keppel Telecom & Transport Ltd (SGX: K11), which is part of the conglomerate, Keppel Corporation Limited (SGX: BN4).

Yesterday, the REIT announced its financial results for the third quarter ended 30 September 2017 (3Q2017). The reporting period was from 1 July 2017 to 30 September 2017.

Here are 10 things investors should know about from the earnings announcement:

1. Gross revenue grew 56.6% year-on-year to S$35.5 million. This was mainly due to the acquisitions of Milan Data Centre, Cardiff Data Centre, B10 Data Centre and the 90.0% interest in Keppel DC Singapore 3. The revenue was also lifted by higher recurring revenue from Keppel DC Singapore 1.

2. Net property income went up 42.1% year-on-year to S$32.3 million.

3. The reporting quarter’s distribution per unit was at 1.74 cents, up from 1.49 cents seen a year ago.

4. The net asset value per unit was at S$0.96, as of 30 September 2017.

5. During the quarter, the REIT acquired B10 Data Centre. This increased Keppel DC REIT’s assets under management to around S$1.54 billion across 13 data centres in Asia and Europe.

6. As of 30 September 2017, portfolio occupancy was 93.4%, with a weighted average lease expiry of 9.2 years.

7. The REIT’s aggregate gearing ratio was at 32.1%, as of 30 September 2017.

8. All of the REIT’s borrowings were unsecured with an average annualised cost of debt of 2.2% per year.

9. The weighted average debt maturity was 2.5 years while the interest coverage ratio remained healthy at 10.6 times.

10. Looking ahead, the manager of the REIT said that it “remains confident that the data centre industry’s growth potential will be underpinned by the increasing reliance on digital data, as well as sustained demand for cloud services. Keppel DC REIT is well-positioned to capture value for unitholders with its global client base and the Manager’s established track record”.

The trust opened at S$1.35 this morning, translating to a price-to-book ratio of 1.4 and a distribution yield of 5.3%.

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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 Sudhan P doesn’t own shares in any companies mentioned.