1Q FY2019 Financial Results Presentation 29 July 2019
Disclaimers This material shall be read in conjunction with Ascendas Reit’s financial statements for the financial year ended 30 June 2019. • This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future • performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income and occupancy, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support Ascendas Reit's future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s current view on future events. The value of Units in Ascendas Reit (“Units”) and the income derived from them, if any, may fall as well as rise. Units are not • obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on the SGX-ST. It is intended that unitholders of Ascendas Reit may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of Ascendas Reit is not necessarily indicative of the future performance of Ascendas Reit. Any discrepancies between the figures in the tables and charts and the listed amounts and totals thereof are due to rounding. • 2
Key Highlights for 1Q FY2019 ONE@Changi City, Singapore 3
Key Highlights for 1Q FY2019 Gross revenue rose 6.1% y-o-y to S$229.7 m. Key drivers were contributions from: ▪ Gross Revenue New acquisitions in the United Kingdom and Australia during FY18/19 • +6.1% y-o-y Net property income (NPI) increased 11.5% y-o-y to S$177.5 m mainly due to the ▪ decrease in property operating expenses by 9.0% y-o-y Net Property Income Land rent, which amounted to S$8.2 m, has been excluded from property operating • +11.5% y-o-y expenses following the adoption of the new Singapore Financial Reporting Standard 116 Leases (FRS 116) effective from 1 April 2019 Excluding the effects from the adoption of FRS 116, NPI would have risen by 6.3% y-o-y • Total Amount Total amount available for distribution rose 6.3% y-o-y to S$124.7 m, in tandem with the ▪ Available for increase in net property income Distribution +6.3% y-o-y Distribution per Unit (DPU) improved 0.1% y-o-y to 4.005 cents taking into account an ▪ Distribution enlarged number of Units in issue Per Unit +0.1% y-o-y 4
Key Highlights for 1Q FY2019 Proposed divestment of 8 Loyang Way 1 in Singapore for S$27.0 m ▪ Investment Highlights Achieved average positive rental reversion of 2.7% for leases in multi-tenant ▪ Operational buildings renewed during the quarter performance Stable portfolio occupancy of 91.1% ▪ Maintained A3 credit rating ▪ Proactive Healthy aggregate leverage at 37.2% ▪ Capital Average interest cost maintained at 3.0% ▪ Management Maintained high level of natural hedge for overseas investments ▪ 5
Financial Performance Nexus @one-north, Singapore 6
1Q FY2019 vs 1Q FY18/19 1Q 1Q ( S$’m ) Variance FY18/19 FY2019 Mainly attributable to: • United Kingdom logistics portfolios acquired in Aug 2018 and Oct 2018 • Gross revenue 229.7 216.6 +6.1% Australian properties, 169-177 Australis Drive, Cargo Business Park and 1-7 • Wayne Goss Drive acquired in Jun 2018, Sep 2018 and Sep 2018 respectively Property operating expenses decreased by 9.0% mainly due to the exclusion of • land rent amounting to S$8.2 million following the adoption of the new Singapore Financial Reporting Standard 116 Leases (FRS 116) effective from 1 Net property Income April 2019 177.5 159.2 +11.5% (NPI) Partially offset by lower property tax savings arising from the retrospective • downward revisions in the annual value of certain properties in FY18/19 Excluding the effects of FRS 116, NPI would have increased by 6.3%, which is in • line with the increase of gross revenue Total amount available 124.7 117.3 +6.3% Distributable income increased in tandem with the increase in NPI. • for distribution • DPU increased 0.1% after taking into consideration the enlarged number of Units in issue DPU (cents) 4.005 4.002 +0.1% Includes taxable (1Q FY2019: 3.495 cents, 1Q FY18/19: 3.671 cents) and capital • (1Q FY2019: 0.510 cents, 1Q FY18/19: 0.331 cents) distributions Note: The Group had 171 properties as at 30 Jun 2019 and 132 properties as at 30 Jun 2018. • Ascendas Reit has changed its financial year end from 31 Mar to 31 Dec. Therefore, the current financial year is a nine-month period from 1 Apr 2019 to 31 Dec 2019 (FY2019). • Please refer to the announcement dated 24 Jul 2019 for more information. 7
1Q FY2019 vs 4Q FY18/19 1Q 4Q ( S$’m ) Variance FY18/19 FY2019 Mainly attributable to positive rental reversions and better occupancy in • Gross revenue 229.7 225.1 +2.1% certain properties in Singapore, partially offset by lower occupancy in Australia Property operating expenses decreased by 15.3% mainly due to the exclusion • of land rent amounting to S$8.2 million following the adoption of FRS 116, Net property income 177.5 163.4 +8.6% effective from 1 April 2019 (NPI) Excluding the effects of FRS 116, the NPI increased by 3.6%, which is • underpinned by the increase of gross revenue Included in 4Q FY18/19 was a one-off distribution of rollover adjustments from • Total amount available prior years amounting to S$7.8 million (DPU impact of 0.250 cents) 124.7 129.0 -3.3% for distribution Excluding the impact of the rollover adjustment, total amount available for • distribution would have increased 2.9% Excluding the impact of the rollover adjustment, the DPU for 4Q FY18/19 would • be 3.898 cents, DPU would have increased 2.7%. DPU (cents) 4.005 4.148 -3.4% Includes taxable (1Q FY2019: 3.495 cents, 4Q FY18/19: 3.633 cents) and capital • (1Q FY2019: 0.510 cents, 4Q FY18/19: 0.515 cents) distributions. Note: The Group had 171 properties as at 30 Jun 2019 and 31 Mar 2019. 8
Investment Management Aperia, Singapore 9
Proposed Divestment: 8 Loyang Way 1, Singapore Two blocks of 4-storey light industrial Description buildings located in the Eastern part of Singapore Remaining Land Tenure ~33 years (at point of sale) Net Lettable Area 12,069 sqm Acquisition Year / Purchase Price 2008/ S$25.0 m Book Value/Valuation (1) (as at 31 Mar S$23.6 m 2019) 8 Loyang Way 1, Singapore Sales Price (2) S$27.0 m Pro-forma Net Property Income Impact S$1.9 m Buyer Seow Kim Polythelene Co Pte Ltd (“SKP”) Estimated Completion Date 2Q FY2019 (1) The valuation was commissioned by the Manager and the Trustee, and was carried out by Jones Lang LaSalle Property Consultants Pte Ltd using the capitalisation approach and discounted cash flow approach. (2) In accordance to Ascendas Reit’s Trust Deed, the Manager is entitled to a divestment fee of 0.5% of the sale price of the properties. 10
Capital Management 1,3 & 5 Changi Business Park Crescent, Singapore 11
Healthy Balance Sheet ▪ Aggregate leverage remained healthy at 37.2% (2) ▪ Available debt headroom of ~S$0.5 b to reach 40.0% aggregate leverage As at As at As at 30 Jun 2019 31 Mar 2019 30 Jun 2018 Total Debt (S$m) (1) 4,258 4,141 3,707 Total Assets (S$m) (2) 11,431 11,414 10,389 Aggregate Leverage (2) 36.3% 35.7% 37.2% Unitholders' Funds (S$m) 6,642 6,073 6,516 Net Asset Value (NAV) per Unit 213 cents 207 cents 209 cents Adjusted NAV per Unit (3) 205 cents 203 cents 205 cents 3,111 2,930 Units in Issue (m) 3,113 (1) Excludes fair value changes and amortised costs. Borrowings denominated in foreign currencies are translated at the prevailing exchange rates except for JPY/HKD-denominated debt issues, which are translated at the cross-currency swap rates that Ascendas Reit has committed to. (2) Excludes the effects of FRS 116. (3) Adjusted for the amount to be distributed for the relevant period after the reporting date. 12
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY2029 ▪ Average debt maturity at 3.8 years (4QFY18/19: 4.0 years; 1QFY18/19: 3.4 years) 13% 900 5% 815 800 Diversified 45% 700 Financial 637 350 593 Resources 600 560 100 525 S$ (million) 500 37% 200 325 192 368 400 354 100 300 254 132 537 465 200 154 360 354 268 268 254 100 200 154 0 - - - - - - - - - - - - - - - - - - - - - FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2029 and beyond Revolving Credit Facilities Committed Revolving Credit Facilities Term Loan Facilities Medium Term Notes 13
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