CICT 2H2023 Financial Results

CICT 2H2023 Financial Results

CICT FY2023 Key Operating Metrics

On 6th February 2024, CapitaLand Integrated Commercial Trust (CICT) announced their 2H2023 Financial Results. CICT’s 2H2023 Distribution Per Unit (DPU) was 5.45 cents, up 1.7% year-on-year. This brings CICT’s total DPU for FY2023 to 10.75 cents, up 1.6% year-on-year.

CICT 2H2023 Financial Results

In 2H2023, gross revenue rose by 4.1% y-o-y to S$785.2 million and net property income grew by 4.0% y-o-y to S$563.6 million.

CICT’s distributable income also rose 2.1% year-on-year (y-o-y) as compared S$355.1 million in 2H2022. The higher distributable income was underpinned by sound operational performance driven by proactive portfolio management and prudent cost management.

2H2023
(S$’000)
2H2022
(S$’000)
Change
Gross Revenue 785,157 754,148 4.1%
Net Property Income 563,570 541,663 4.0%
Amount Available for
Distribution
369,503 361,768 2.09%
Distributable Income
362,481 355,078 2.10%
Distribution Per Unit (“DPU”) (cents) 5.45 5.36 1.65%

CICT Full Year FY2023 Financial Results

In FY2023, CICT’s Gross Revenue rose by 8.2% y-o-y to S$1,559.9 million. Net Property Income
also grew by 7.0% y-o-y to S$1,115.9 million.

The better performance was largely attributed to higher contribution from Raffles City Singapore and the full-year contribution from acquisitions completed in 2022.

Having said that, the better performance was offset by higher finance costs from the full-year impact of borrowings taken to fund the acquisitions in 2022 and higher interest rates.

FY2023
(S$’000)
FY2022
(S$’000)
Change
Gross Revenue 1,559,934 1,441,747 8.2%
Net Property Income 1,115,907 1,043,283 7.0%
Amount Available for
Distribution
728,486 712,968 2.13%
Distributable Income
715,726 702,374 1.87%
Distribution Per Unit (“DPU”) (cents) 10.75 10.58 1.60%

CICT 2H2023 Debt

CICT 2H2023 Debt Maturity Profile

As of 31st December 2023, CICT’s aggregate stood at 39.9%. In my opinion, this is high as it is near my threshold of 40%. Approximately 78% of CICT’s total borrowings were on fixed interest rate to mitigate against sudden interest rate hikes.

As you can see from the above chart, CICT’s debt maturity profile is long with an average maturity of 3.9 years.

CICT’s 2H2023 Occupancy

CICT 2H2023 Occupancy

As of 31st December 2023, CICT’s overall portfolio occupancy stood at 97.3%. As you can see from the above comparison, the occupancy improved across its retail, office and integrated development.

CICT 2H2023 Lease Expiry

At the end of January 2024, Commerzbank ended its lease at Gallileo. The Manager is in advanced talks with a prospective tenant from the financial services sector to take up most of the lettable space at Gallileo after the completion of the upgrading works.

At the moment, there is no immediate concern about the lease expiry as they are well-spread.

CICT’s Current Dividend Yield

CapitaLand Integrated Commercial Trust Share Price 06-Feb-2024

Based on CICT’s closing share price of S$1.98 and FY23 full year DPU of 10.75 cents, this translate to a current dividend yield of 5.43%. In my opinion, this is not very attractive. CICT’s dividend yield has always been hovering between 5% to less than 6%.

Summary of CICT 2H2023 Financial Results

In 2024, CICT is embarking on a few Asset Enhancement Initiatives (AEI).

  • Enhancement works at IMM conducted over four phases from 1Q 2024 and expected to complete in 3Q 2025.
  • A downtime of at least 18 months at Gallileo in Frankfurt for enhancement works.
  • 101 Miller Street will undergo an approximately A$9 million upgrade to transform its lobby into a best-in-class multifunctional communal space in supporting tenants’ return to office scheduled to be completed in 2Q2024.

To summarize CICT’s 2H2023 & FY2023 financial results, the pros are

  • CICT’s 2H2023 Distribution Per Unit (DPU) was 5.45 cents, up 1.7% year-on-year.
  • CICT’s total DPU for FY2023 to 10.75 cents, up 1.6% year-on-year.
  • In 2H2023, gross revenue rose by 4.1% y-o-y to S$785.2 million and net property income grew by 4.0% y-o-y to S$563.6 million.
  • CICT’s distributable income also rose 2.1% year-on-year (y-o-y) as compared S$355.1 million in 2H2022.
  • In FY2023, CICT’s Gross Revenue rose by 8.2% y-o-y to S$1,559.9 million. Net Property Income
    also grew by 7.0% y-o-y to S$1,115.9 million.
  • CICT’s overall portfolio occupancy stood at 97.3%.
  • Occupancy improved across its retail, office and integrated development.
  • Lease expiries are well-spread.

The cons are:

  • CICT’s aggregate stood at 39.9%.
  • Commerzbank ended its lease at Gallileo.
  • Low current dividend yield of 5.43% at current share price of S$1.98.

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