Frasers Logistics and Commercial Trust 1HFY23

Frasers Logistics and Commercial Trust 1HFY23 Financial Results

FLCT Overview 1HFY23

On 4th May 2023, Frasers Logistics and Commercial Trust (FLCT) released their 1HFY23 financial results. A Distribution Per Unit of 3.52 Singapore cents was announced, representing a decrease of 8.6% from 3.85 Singapore cents in 1HFY22.

In the presentation, the manager of Frasers Logistics and Commercial Trust shared that the earnings performance was impacted by Forex weakness. However, overall operational performance remains robust.

Let us take a deeper look into their 1HFY23 financial results.

Frasers Logistics and Commercial Trust 1HFY23 Financial Results

In 1HFY23, Gross Revenue declined 11.7% to S$208.0 million and Adjusted Net Property Income declined 13.4% to S$155.9 million.
Notwithstanding the loan repayment of S$505 million in 2HFY22, following
the Cross Street Exchange divestment, finance costs remain elevated in
1HFY23 due to higher interest costs on borrowings.
As shared earlier, Distribution Per Unit decreased by 8.6% to 3.52 Singapore cents as compared to 3.85 Singapore cents in 1HFY22.
1HFY23
(S$’000)
1HFY22
(S$’000)
Change
Gross Revenue 207,981 235,670 (11.7%)
Adjusted Net Property Income 155,917 180,085 (13.4%)
Finance Cost
(21,730) (22,292) 2.5%
Amount Distributable To Unitholders 130,782 142,108 (8.0%)
Distribution Per Unit (“DPU”) (cents) 3.52 3.85 (8.6%)

Debt

As of 31st March 2023, aggregate leverage stood at 27.8%. In my opinion, this is low and extremely healthy.

Average Weighted Debt Maturity stood at 2.4 years. Debt maturity profile is well spread. FLCT shared that they also have sufficient internal funds and facilities to refinance or repay the debt maturing in FY2023.

FLCT Debt Maturity Profile 1HFY23

76.2% of borrowings are hedged at fixed rates to mitigate against sudden spike in interest rates. Every potential 50 bps increase in interest rates on variable rate borrowings is estimated to impact DPU by 0.06 Singapore cents.

Occupancy

Overall portfolio occupancy stood at 95.9%. The occupancy for the Logistics and Industrial segment remains strong at 100% while the occupancy rate for Commercial segment stood at 89.8%.

As you can see from the table below, the occupancy at 357 Collins Street (Australia) dipped from 94.4% to 88.6%.

FLCT Occupancy 1HFY23

Lease Expiry Profile

The lease expiry profile for the logistics and industrial segment is well spread with nothing of immediate concern.

FLCT Industrial Lease Expiry Profile 1HFY23

Regarding the lease expiry for the commercial segment, 10.2% of the leases are vacant and needs proactive monitoring for upcoming expiry of leases.

FLCT Commercial Lease Expiry Profile 1HFY23

Frasers Logistics and Commercial Trust Share Price and Current Dividend Yield

Based on FY22 full year distribution of 7.62 cents and current Frasers Logistics & Commercial Trust share price of S$1.21, this translate to an attractive current dividend yield of 6.30%.

FLCT Share Price 24 May 2023

Summary of Frasers Logistics and Commercial Trust 1HFY23 Financial Results

As usual, here are the pro and cons based on Frasers Logistics and Commercial Trust 1HFY23 financial results.

Pros

  • Low and healthy aggregate leverage at 27.8%.
  • Well spread debt maturity profile.
  • Healthy overall portfolio occupancy at 95.9%.
  • Attractive current dividend yield of 6.30%.

Cons

  • Gross Revenue declined 11.7% to S$208.0 million.
  • Adjusted Net Property Income declined 13.4% to S$155.9 million.
  • Distribution Per Unit decreased by 8.6% to 3.52 Singapore cents.
  • Low occupancy of 88.6% at 357 Collins Street (Australia).

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