I was extremely busy with work this month and thus didn’t have time and energy to catch up on the financial results of the stocks and REITs that I have held in my stock portfolio. Earlier this year, I have added SPH REIT to my stock portfolio. SPH REIT currently makes up 11% of my entire stock portfolio.
On 10th October 2019, SPH REIT announced their 4QFY19 financial results. The results are inline with my expectations. The most important of all, Distribution Per Unit (“DPU”) increased by 2.1% to 1.46 cents.
The full year Distribution Per Unit (“DPU”) continued its growth by 1.1% to reach 5.60 cents for FY19.
4QFY19 Financial Results
| 4QFY19 (S$’000) | 4QFY18 (S$’000) | Change | |
| Gross Revenue | 58,374 | 52,962 | 10.2% |
| Net Property Income | 45,809 | 40,979 | 11.8% |
| Distributable Income | 35,368 | 34,576 | 2.3% |
| Distribution Per Unit (“DPU”) (cents) | 1.46 | 1.43 | 2.1% |
Full Year FY19 Financial Results
| FY19 (S$’000) | FY18 (S$’000) | Change | |
| Gross Revenue | 228,635 | 211,802 | 7.9% |
| Net Property Income | 179,779 | 165,996 | 8.3% |
| Distributable Income | 144,790 | 142,310 | 1.7% |
| Distribution Per Unit (“DPU”) (cents) | 5.60 | 5.54 | 1.1% |
Gearing Ratio
The debt gearing currently stood at 27.5%. I personally felt the gearing ratio is low for a retail REIT and there is definitely further room for more acquisitions.
Occupancy Rate
Overall portfolio occupancy stood at 99.1%. This is at healthy levels and I shall not drill into the details here.
Visitor traffic and tenant sales annual trend
The assets in SPH REIT enjoys an increasing visitor traffic year on year. As we can see below, tenant sales is also increasing year on year. When sales are stable, it is likely tenants will continue to renew their rental. This provides some form of stability in SPH REIT.
Hi, there’s an annoucement made whic quoted “SPH Reit’s manager announced after trading hours on Tuesday that it has elected to receive the base fee component of the management fee for the period from Dec 1, 2019 to Feb 29, 2020 in the form of units in SPH Reit. A total of about 2.5 million units in SPH Reit were issued on Tuesday at the average price of S$1.0438 per unit for the purpose of payment of the base fee.”
Based on your opinion, how would you interpret the future performance in terms of stock price and dividend?
Hi PS, stock price is not directly dependent on the payment of management fee in the form of units to the management. Taking management fee in the form of units means if the stock price fails to perform, the value of the units that the management holds also drops. Thus, the management will be motivated to make SPH REIT perform because if the REIT perform, the value of the unit increases if the stock price increase. Dividend will definitely be reduced in current COVID-19 situation, so is investor confidence because SPH REIT is a retail reit and retail reits are impacted by mall closures.
Hi,
Noted and appreciate the fast respond 🙂
Thumbs up!