MAPLETREE Logistics Trust’s (MLT) distribution per unit (DPU) fell 8.9 per cent to S$0.02068 for its first quarter ended Jun 30, from S$0.02271 in Q1 FY2024.
MLT’s manager on Wednesday (Jul 24) reported a fall in revenue to S$181.7 million in Q1 FY2025, from S$182.2 million in the year-ago period. This was mainly due to weaker performance in China, the absence of revenue from divested properties, and currency depreciation of the yen and renminbi.
Net property income declined 0.9 per cent to S$156.7 million in Q1 FY2025, from S$158.1 million in Q1 FY2024. The fall was mitigated by higher contributions from the trust’s Singapore and Hong Kong properties, and acquisitions completed within the quarter.
“We continue to face headwinds from persistently high borrowing costs, regional currency depreciation and weakness in China,” said Jean Kam, chief executive officer of the trust’s manager.
High borrowing costs have dented distributions to unitholders, with expenses rising 9.4 per cent to S$38.5 million in Q1 FY2025, from S$35.1 million in Q1 FY2024.
Lower divestment gains of S$5.7 million in the current period, compared with S$8.4 million in Q1 FY2024, also dragged on distributions, which fell 7.4 per cent to S$103.7 million in Q1 FY2025 from S$112 million in Q1 FY2024.
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MLT acquired three grade-A assets in Malaysia and Vietnam from its sponsor, Mapletree, during the quarter. The trust also divested two properties in Singapore and China with a combined value of about S$26.9 million.
The book value of MLT’s portfolio of 188 assets was S$13.4 billion as at Jun 30. The weighted average lease expiry stood at 2.9 years as at the end of the quarter, with occupancy at 95.7 per cent, a slight drop from 96 per cent in Q4 FY2024. MLT’s leverage ratio was 39.6 per cent in Q1 FY2025.
China remains a challenging market for the trust, with negative rental reversions expected to persist amid an uncertain global economic outlook. Higher borrowing costs and currency depreciation against the Singapore dollar will continue to weigh on MLT’s financial performance in the year ahead.
To mitigate the impact on distributions, about 78 per cent of MLT’s income stream for the next 12 months has been hedged on the Singapore dollar, and about 83 per cent of its total debt is on fixed rates.
“We will continue to adopt prudent risk management strategies to navigate through these challenging times, while driving our portfolio rejuvenation strategy to strengthen MLT’s resilience,” said Kam.
Units of MLT closed flat at S$1.35 on Wednesday.
