First Real Estate Investment Trust REIT (SGX: AW9U) released its fourth-quarter earnings report yesterday. The reporting period was from 1 October 2015 to 31 December 2015.
DPU - 2.09 cents
Yield - 6.9% | 6.75% (base on my avg cost price)
NAV - $1.04
Gearing - 34%
Current price - $1.2
Financial highlights
- Gross revenue rose to $25.7 million in the reporting quarter, up 7.4% from the same quarter a year ago. For the full year, gross revenue climbed 8% to $100.7 million.
- Quarterly net property income (NPI) stepped up by 7.9% year-on-year to $25.4 million. For the whole of 2015, NPI was up by 8.1% to $99.3 million.
- For the reporting quarter, First REIT’s distribution per unit (DPU) was 2.09 cents, a 2.5% bump up from the 2.04 cents seen in the fourth-quarter last year. For 2015, DPU was 8.3 cents, a 3.1% increase from the previous year.
- Total assets under management was valued at around $1.27 billion as of 31 December 2015. The net asset value per unit was $1.04, a slight 2% uptick from $1.02 in 2014.
Other highlights
First REIT completed its acquisition of the Kupang Property for $70 million in December 2015 and received approval for AEI for Siloam Hospitals Surabaya. This is to be expected to be completed in 2019.
Beyond this, Lippo Karawaci has 46 hospitals in its pipeline which can be possible acquisition targets for First REIT in the future.
Dr Ronnie Tan, the chief executive of First REIT’s manager, had the following comments in the earnings release on the reporting quarter as well as the REIT’s near-term future:
“First REIT continues to deliver strong performance with steady growth in our income streams and consecutive quarterly rise in DPU due to our strategic yield-accretive acquisitions since our listing. The Trust ended the financial year with an enlarged portfolio of 17 properties and an 8.5% growth in assets-under-management to S$1.27 billion from S$1.17 million.
Moving into FY 2016, Unitholders can look forward to continuous growth as the Trust plans to further expand our asset size with more yield-accretive acquisitions. Moreover, with the increase of the regulatory gearing limit from 35% to 45% proposed by the Monetary Authority of Singapore, this will give us greater operational flexibility and headroom for more acquisitions.”
Despite a lukewarm economy in Indonesia, First REIT expects healthcare spending to be supported by the universal healthcare scheme introduced by the government. First REIT cited studies from BMI Research which estimates that annual healthcare expenditure will increase by 10% per year to US$25 billion in 2017.
Summary
Still a hold for me albeit how small they are. Glad to see that DPU continues to grow but may need to look out for debt and how they are gonna to get cash to continue to grow as well.
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