3 Things Investors Should Know From Parkway Life REIT’s Latest Earnings

Parkway Life REIT (SGX: C2PU) is one of the largest listed healthcare real estate investment trusts in Asia by asset size.

The REIT has ownership over three private hospitals in Singapore, and holds stakes in 45 healthcare-related assets in Japan. It also has strata-titled units/lots in Gleneagles Intan Medical Centre in Malaysia.

Two weeks ago, Parkway Life REIT reported its 2017 third quarter earnings. Let’s look at three useful pieces of information investors may want to know from the announcement:

1. The overall result

The following table shows the results of Parkway Life REIT for the reporting quarter:

Source: Parkway Life REIT 2017 third quarter earnings release

The REIT  delivered a mixed performance for the quarter.

On the negative side was a 1.4% decline in gross revenue as a result of a strong Japanese yen. On the positive side, there’s the 10.1% increase in distribution per unit (DPU).

The growth in DPU came from a 2.8% increase in distributable income from recurring operations, and the presence of a one-off distribution of divestment gains in the reporting quarter. Cost savings arising from the refinancing of debt helped Parkway Life REIT achieve growth in distributable income from recurring operations.

2. Breakdown of net property income by properties

Here’s a chart showing the breakdown of Parkway Life REIT’s 2017 third quarter net property income (NPI) by properties:

Source: Parkway Life REIT 2017 third quarter earnings presentation

We can see that Parkway Life REIT’s Singapore and Japan properties accounted for 62% and 38%, respectively, of the total NPI in the third quarter of 2017. In Singapore, the REIT saw all three of its properties – Mount Elizabeth, Gleneagles, and Parkway East – deliver higher NPIs in the quarter.

3. Historical DPU

The chart below shows Parkway Life REIT’s DPU going back to 2007:

Source: Parkway Life REIT 2017 third quarter earnings presentation

What’s noteworthy is that Parkway Life REIT’s DPU has grown in every single year since 2007. For further perspective, recurrent DPU has increased by 7.5% per year from 2007 to 2016 – this is a sign that the REIT has been growing its DPU in a sustainable manner in the past decade.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.