10 Highlights From Mapletree Industrial Trust’s FY17/18 Earnings Update

With a total of 99 properties valued at more than S$4 billion, Mapletree Industrial Trust (SGX:ME8U) is one of the largest industrial REITs in Singapore. On Monday, the REIT released its fourth quarter and full year earnings update for the fiscal year ended 31 March 2018 (FY17/18). Here are 10 highlights:

1. Gross revenue for the fourth fiscal quarter rose 2.9% year-on-year to S$90.4 million, from S$87.8 million. Consequently net property income also grew 2.9% to S$67.9 million from S$66.0 million the year before. Together with contributions from joint ventures, Mapletree Industrial Trust’s amount available for distirbution rose 7.2% to S$55.5 million from S$51.8 million a year ago.

2. Distribution per unit (DPU) for the reporting quarter was up 2.4% to 2.95 Singapore cents from 2.88 Singapore cents in the same period last year.

3. On a full-year basis, Mapletree Industrial Trust’s net property income rose substantially by 8.1% to S$277.6 million, on the back of a 6.7% increase in gross revenue to S$363.2 million. Consequently, amount available for distribution was up 5.3% to S$215.8 million, from S$205 million a year ago. DPU for the whole of FY17/18 was 11.75 cents, 3.2% higher than the DPU of 11.39 cents in FY16/17.

4. The higher net property income for FY17/18 was largely due to new revenue contributions from the REIT’s newly completed build-to-suit project for HP Singapore, and a pre-termination compensation sum received from one of its previous tenants. Contributions from the REIT’s newly-acquired 40% stake in 14 data centers in the United States also added to its distributable income.

5. Mapletree Industrial Trust recorded a S$65.5 million revaluation gain in FY17/18. Consequently, net asset value per unit rose 4.3% to S$1.47 on 31 March 2018, compared to S$1.41 a year ago.

6. As of 31 March 2018, Mapletree Industrial Trust had total debt of S$1.22 billion, down from S$1.45 billion on 31 December 2017. As a result, its aggregate leverage improved from 33.8% to 33.1% from the previous quarter. The REIT had a weighted averaged tenor of debt at 3.3 years and an interest cover of 6.7 times as of 31 March 2018.

7. The REIT also ended FY2017/18 with a portfolio occupancy rate of 90.0%, and a weighted average lease expiry of 3.8 years. It had a tenant retention rate of 83.8% for the fourth quarter of FY17/18. 67.6% of its tenants have leased its properties for more than 4 years.

8. In Feburary this year, the REIT completed the development of 30A Kallang Place and Kallang Basin 4 Cluster. It also expects to complete the development of a six-storey build-to-suit data center in Singapore towards the end of this year.

9. On its prospects in Singapore, the REIT’s management said:

“Despite the positive outlook, threats to free trade and geopolitical tensions continue to threaten the growth momentum. Impending large supply of competing industrial space will exert pressure on both occupancy and rental rates. The Manager will continue to focus on tenant retention to maintain a stable portfolio occupancy.”

10. At the time of writing, units of Mapletree Industrial Trust exchanged hands at S$1.99 each. This translates to a price-to-book ratio of 1.35 and trailing distribution yield of 5.9%.

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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 Jeremy Chia doesn’t own shares in any companies mentioned. The Motley Fool Singapore has a recommendation on Mapletree Industrial Trust.