Within expectations. Mapletree Logistics Trust (MLT) produced a good set of 3Q11 results, which was within our expectations. Revenue grew by 25.4% YoY to S$68.3m, driven by contributions from accretive acquisitions, positive rental reversions of 22% and improvement in occupancy rate to 99% (98% in 3Q10). While NPI increased at a slightly slower pace of 23.7% due to higher number of multi-tenanted buildings and repair works, amount distributable to unitholders was up 29.7% on lower other expenses and partial distribution from divestment gains of 9 and 39 Tampines. This translates to a DPU of 1.69 S cents (+9.7% YoY due to enlarged unit base), or an annualized yield of 7.8%. For 9M11, revenue and DPU tallied S$196.4m and 4.84 S cents respectively. These formed 75.6% and 77.8% of our full-year estimates (74.7% and 71.2% of consensus), respectively.
Strong capital management. As at 30 Sep, the group's aggregate leverage was at 41.3% (relatively unchanged from 40.6% in 2Q), still healthy in our view. Subsequent to 3Q, management also updated that it had successfully refinanced JPY17b (S$281m) of debt maturing in 2012 by extending its maturity to 2018. This substantially improved its average debt duration from 2.7 to 3.7 years and brought down its proportion of debt maturing 2012 from 31% to 14%. Hence, we do not foresee any major refinancing risk in the coming year.
Diversified portfolio to provide stability. Going forward, MLT cautioned that the Asian economies are not likely to escape unscathed with a deepening euro zone debt crisis and stagnating US economy. As such, it will remain watchful of the evolving environment and maintain a disciplined approach towards investment activities. However, management added that it is still seeing active customer enquiries and high rate of renewal/ replacement of expiring leases thus far (88% of NLA due for renewal has been renewed YTD). Moreover, it expects its diversified portfolio and healthy weighted average lease to expiry of six years to provide relative stability in its operating performance.
Maintain BUY. MLT is also focusing on asset management initiatives to identify growth opportunities and optimize yield. On this front, the group identified 21/23 Benoi Sector as a suitable redevelopment opportunity (which may potentially add 70,000 sqm GFA to its portfolio). While more details will only be announced in due course, we are positive on this development as it clearly shows MLT's proactive approach to enhance value. We maintain our BUY rating on MLT with revised fair value of S$1.07 (S$1.06 previously), after factoring in the 3Q results.
No comments:
Post a Comment