Frasers Logistics and Commercial Trust 2HFY23 Results

Frasers Logistics and Commercial Trust 2HFY23 Financial Results

Frasers Logistics and Commercial Trust FY23 Overview

On 2nd November 2023, Frasers Logistics and Commercial Trust announced their 2HFY23 financial results. The Distribution Per Unit (DPU) declared for 2HFY23 was 3.52 cents, making the full year DPU for FY23 to be 7.04 cents.

Frasers Logistics and Commercial Trust makes up 9.84% of my stock portfolio. The FY23 full year DPU was lower than FY22. As a dividend investor, I am deeply concern. What attributed to the decrease?

Let us look into the details of Frasers Logistics and Commercial Trust’s financial results to find out more.

Frasers Logistics and Commercial Trust 2HFY23 Financial Results

In 2HFY23, revenue was lower mainly due to the weaker AUD/SGD exchange rates and lower average occupancies at Maxis Business Park and 357 Collins Street.

Finance cost was 29.7% higher because of increase in interest rates and additional borrowings drawn for capex and fund through developments.

As a result, Distributable income for 2HFY23 was correspondingly lower at S$131.6 million, from S$139.6 million in 2HFY22.

Thus, Distribution Per Unit (DPU) was 6.6% lower in 2HFY23 at 3.52 cents, from 3.77 cents in 2HFY22.

2HFY23
(S$’000)
2HFY22
(S$’000)
Change
Gross Revenue 212,801 214,517 (0.8%)
Adjusted Net Property Income 155,525 162,053 (4.0%)
Finance Cost
25,033 19,303 29.7%
Amount Distributable To Unitholders 131,557 139,645 (5.8%)
Distribution Per Unit (“DPU”) (cents) 3.52 3.77 (6.6%)

Frasers Logistics and Commercial Trust FY23 Financial Results

If we look at the full year FY23 financial results, revenue was lower mainly due to the weaker AUD/SGD exchange rates and lower average occupancies at Farnborough Business Park, Maxis Business Park and 357 Collins Street.

In FY23, total finance cost was 12.4% higher because of increase in interest rates and additional borrowings drawn for capex and fund through developments.

The full year Distribution Per Unit (DPU) for Frasers Logistics and Commercial Trust fell 7.6% to 7.04 cents as compared to 7.62 cents in FY22.

FY23
(S$’000)
FY22
(S$’000)
Change
Gross Revenue 420,782 450,187 (6.5%)
Adjusted Net Property Income 311,442 342,138 (9.0%)
Finance Cost
46,763 41,595 12.4%
Amount Distributable To Unitholders 262,339 281,753 (6.9%)
Distribution Per Unit (“DPU”) (cents) 7.04 7.62 (7.6%)

Debt

As of 30th September 2023, Frasers Logistics and Commercial Trust’s aggregate leverage stood healthy at 30.2%.

There is no major refinancing due in 1HFY24. Over 98% of debt maturing in FY2024 is due in 2HFY24. Facilities are already in place for more than half of the debt maturing in FY2024.

77.2% of the borrowings are also hedged at fixed interest rates to mitigate against sudden interest rate hikes.

Occupancy

Frasers Logistics and Commercial Trust 2HFY23 Occupancy

Overall portfolio occupancy stood at 96.0%. The occupancy for the Logistics and Industrial segment remains strong at 100% while the occupancy rate for Commercial segment continue to be weak at 89.9%.

Lease Expiry Profile

Frasers Logistics and Commercial Trust 2HFY23 Lease Expiry

Leasing momentum was robust in 4QFY23, reducing FY2024 expiries by 1.2%, from 9.9% as at 30 June 2023. 6 industrial and 46 commercial leases due to expire in FY2024.

Current Dividend Yield

Frasers Logistics and Commercial Trust Share Price 28-Nov-2023

Based on the current share price of S$1.07 and FY23 full year distribution of 7.04 cents, this translate to a current dividend yield of 6.58%.

Summary of Frasers Logistics and Commercial Trust 2HFY23 Financial Results

Let me summarize the pros and cons based on Frasers Logistics and Commercial Trust FY23 financial results.

Pros

  • Aggregate leverage stood healthy at 30.2%.
  • No major refinancing due in 1HFY24.
  • 77.2% of the borrowings are also hedged at fixed interest rates.
  • Overall portfolio occupancy is healthy at 96.0%.
  • Current dividend yield of 6.58%.

Cons

  • Revenue was lower mainly due to the weaker AUD/SGD exchange rates.
  • Lower average occupancies at Farnborough Business Park, Maxis Business Park and 357 Collins Street.
  • Finance cost was higher in FY23.
  • FY23 DPU fell 7.6% to 7.04 cents.

 

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