MPACT 3Q FY23 24 Financial Results

MPACT 3Q FY23/24 Financial Results

MPACT 3Q FY23 24 Key Highlights

On 29th January 2024, MPACT (Mapletree Pan Asia Commercial Trust) announced its 3Q FY23/24 Financial Results. Gross Revenue and Net Property Income (NPI) rose 0.8% and 1.7% year-on-year respectively. Despite the gain, Distribution Per Unit (DPU) was tempered by higher interest rates and the absence of a one-off cross-currency interest rate swap (CCIRS) gain in 3Q FY23/24.

MPACT 3Q FY23/24 Financial Results

As shared above, the growth in Gross Revenue and Net Property Income was primarily driven by Singapore’s robust performance, which delivered positive contribution after fully offsetting higher utility expenses.

MPACT’s portfolio in Hong Kong and Japan showed resilience by delivering steady earnings in local currency terms. A stronger Singapore dollar (“SGD”) dampened the overseas contributions.

As a result, Distribution Per Unit (DPU) declined 9.1% to 2.20 cents in 3Q FY23/24.

To mitigate forex volatilities, approximately 94% of MPACT’s expected distributable income
(based on rolling four quarters) was derived from or hedged into SGD.

3Q FY23/24
(S$’000)
3Q FY22/23
(S$’000)
Change
Gross Revenue 241,586 239,752 0.8%
Net Property Income 182,436 179,389 1.7%
Property expenses
(59,150) (60,363) 2.0%
Net Finance Costs
(57,394) (50,304) (14.1%)
Amount Distributable To Unitholders 115,260 127,038 (9.3%)
Distribution Per Unit (“DPU”) (cents) 2.20 2.42 (9.1%)

MPACT 3Q FY23/24 Debt

As of 31 December 2023, the aggregate leverage ratio stood high at 40.8% and the average term to
maturity was 2.8 years. 85.0% of MPACT’s borrowings are hedged at fixed interest rates.

MPACT 3Q FY23 24 Debt Maturity

As shared by the manager of MPACT, all refinancing requirements for FY23/24 have also been completed, and advanced talks are in progress for refinancing in FY24/25.

MPACT 3Q FY23/24 Occupancy

MPACT 3Q FY23 24 Occupancy

MPACT’s overall portfolio occupancy improved from 96.3% to 96.7%. Festival Walk remained 100% committed.

MPACT achieved a positive rental reversion of 4.1%. A positive rental reversion means an increase in rent at review where the gross rent is below the estimated rental. The Singapore properties stood out with significant rental uplifts ranging from 6.7% at Mapletree Business City to 14.2%
at VivoCity.

MPACT 3Q FY23/24 Lease Expiry

MPACT 3Q FY23 24 Lease Expiry

MPACT’s overall portfolio Weighted Average Lease Expiry (WALE”) stood at 2.5 years.

MPACT’s Current Dividend Yield

MPACT Share Price 23-Feb-2024

Based on MPACT’s closing share price of S$1.39 and FY22/23 full year distribution of 9.61 cents, this translate to a current dividend yield of 6.91%.

Having said that, the YTD Distribution Per Unit (DPU) was down 10.1% from 7.36 cents to 6.62 cents.

The DPU will continue to be weighed down by:

  • Full-period impact of higher utility costs.
  • Higher interest rates.
  • Forex pressures from a stronger SGD against all foreign currencies.

If we estimate FY23/24 full year DPU to be 8.82 cents, the estimated dividend yield based on current price for MPACT will be around 6.35%.

Summary of MPACT 3Q FY23/24 Financial Results

Let me summarize the pros and cons based on MAPCT 3Q FY23/24 Financial Results.

The pros are

  • Gross Revenue and Net Property Income (NPI) rose 0.8% and 1.7% year-on-year respectively.
  • To mitigate forex volatilities, approximately 94% of MPACT’s expected distributable income
    (based on rolling four quarters) was derived from or hedged into SGD.
  • 85.0% of MPACT’s borrowings are hedged at fixed interest rates.
  • Overall portfolio occupancy improved from 96.3% to 96.7%.
  • MPACT achieved a positive rental reversion of 4.1%.
  • Current high dividend yield of 6.91%. Factoring the lower future DPU, the estimated yield is 6.35%.

The cons are

  • A stronger Singapore dollar (“SGD”) dampened the overseas contributions.
  • Distribution Per Unit (DPU) declined 9.1% to 2.20 cents in 3Q FY23/24.
  • Aggregate leverage ratio stood high at 40.8%.

 

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