Mapletree Commercial Trust had released their 4QFY19/20 financial results yesterday on 22nd April 2020. The results are excellent with gross revenue and net property income (“NPI”) up 12.8% and 12.6% respectively from 4Q FY18/19, driven mostly by Mapletree Business City (“MBC”) II and in spite of COVID-19 rental rebates.
However, in view of the uncertainties from the current COVID-19 situation, Mapletree Commmercial Trust had retained S$43.7 million from the distributable amount. Thus, Distribution Per Unit (“DPU”) had fallen 60.6% to 0.91 cents for 4QFY19/20.
Similar to what Suntec mall has done, fixed rent for April 2020 will be waived for eligible
retail tenants which is on top of the S$29 million of relief packages that have been granted/committed to support its retail tenants. This will have an impact on subsequent distributable income for subsequent quarters. On a positive note, this impact should be cushioned by the income coming from MBC I and II.
4QFY19/20 Financial Results
| 4QFY19/20 (S$’000) | 4QFY18/19 (S$’000) | YoY(%) | |
| Gross Revenue | 127,320 | 112,899 | 12.8% |
| Net Property Income | 98,571 | 87,560 | 12.6% |
| Distributable amount before capital allowance claims and capital distribution retention | 73,851 | 66,861 | 10.5% |
| Distributable Amount | 30,098 | 66,861 | (55.0)% |
| Distribution Per Unit (“DPU”) (cents) | 0.91 | 2.31 | (60.6)% |
FY19/20 Full Year Financial Results
| FY19/20 (S$’000) | FY18/19 (S$’000) | YoY(%) | |
| Gross Revenue | 482,825 | 443,893 | 8.8% |
| Net Property Income | 377,940 | 347,627 | 8.7% |
| Distributable amount before capital allowance claims and capital distribution retention | 287,587 | 264,027 | 8.9% |
| Distributable Amount | 243,218 | 264,027 | (7.9)% |
| Distribution Per Unit (“DPU”) (cents) | 8.00 | 9.14 | (12.5)% |
Occupancy
Occupancy stood at 98.7%. Full year shopper traffic and tenant sales at VivoCity lower by 6.8% and 3.4% respectively largely due to COVID-19 impact in 4Q FY19/20.
Debt
Gearing ratio stood at 33.3% which is in a healthy range with all term loans due in FY19/20 refinanced in advance.
Current Dividend Yield
Based on FY19/20 full year distribution of 8 cents and current price of S$1.75, this translates to a current dividend yield of 4.57%.
If Mapletree Commercial Trust continues to pay out only 0.91 cents for each quarter in FY20/21, this translates to an estimated dividend yield of 2.08%.
Summary
My opinion of Mapletree Commercial Trust is that it is still expensive at current price. Just based on the FY19/20 full year distribution of 8 cents, this only gives a current dividend yield of 4.57%.
Even if you catch it at the price of S$1.50, this only gives you a dividend yield of 5.33%. The worst case is Mapletree Commercial Trust continues to retain capital for the next few quarters and you see the dividend yield at 2.08%.
However, Mapletree Commercial Trust is a great REIT with outstanding financial results. When the COVID-19 situation is over, I believe it will regain its shine but then the share price should have priced in the recovery.
I just shared on MCT too. Its price is hovering above NAV. Next quarter results should be even worse since the circuit breaker only started on 7 Apr