Mapletree Logistics Trust posts 2.5% drop in Q4 DPU to 2.211 cents

HIGH interest costs and weak regional currencies weighed on Mapletree Logistics Trust’s : M44U 0% performance for Q4 ended Mar 31, with distributions per unit (DPU) falling 2.5 per cent to 2.211 cents.

Gross revenue for the quarter rose 1.2 per cent to S$181 million, while net property income (NPI) was up 0.6 per cent to S$155.3 million, the trust announced on Monday (Apr 29).

NPI was weighed down by a 4.5 per cent increase in property expenses to S$25.7 million.

MLT’s Q4 growth was also dampened by weaker performance in China, higher borrowing costs with the high interest rate environment, and the depreciation of certain regional currencies against the Singapore Dollar.

These currencies are mainly the Japanese Yen, Chinese Yuan, Malaysian Ringgit and South Korean Won. On a constant-currency basis, MLT’s revenue and NPI would have instead grown by 3.6 per cent and 3 per cent, respectively.

For the full year, MLT posted a 0.4 per cent rise in gross revenue to S$733.9 million, while NPI was relatively flat at S$634.9 million.

The amount distributable to unitholders rose 3.3 per cent to S$447.1 million, lifted partly by S$41.6 million of divestment gains. But DPU slipped 0.1 per cent to 9.003 cents on an enlarged unit base.

MLT’s portfolio occupancy stands at a “healthy” 96 per cent, said Ng Kiat, chief executive of the trust’s manager, on Monday. The portfolio’s weighted average lease expiry is about three years.

“However, high borrowing costs, weak regional currencies and the challenging leasing environment in China have impacted our performance, and will remain headwinds going forward,” she said.

In China, the leasing environment continues to be “challenging” amid uncertainty over its economic recovery, and negative rental reversions are expected to continue, noted MLT in its earnings statement.

“The manager anticipates that replacement loans and hedges will be at significantly higher than existing rates. In addition, the persistent weakness of regional currencies against the Singapore dollar will continue to exert pressure on MLT’s distributions,” the trust added.

MLT owns 187 properties as at Mar 31, with an aggregate portfolio property valuation of S$13.2 billion – a 3.2 per cent increase from the previous year, boosted by its acquisition of nine properties in the year.

The rise was however partly offset by MLT’s divestment of seven properties during the year, a currency translation loss of S$470.9 million and a S$1.8 million net fair-value loss on investment properties. The latter largely arises from properties in Australia and China.

Units of MLT ended Monday at S$1.34, down S$0.01 or 0.7 per cent.