The earnings season is here once again, where companies will be reporting their financial performances, or provide a business update, for the quarter ended 31 March 2021 in the coming days and weeks ahead.
After trading hours yesterday (21 April 2021), blue-chip logistics REIT Mapletree Logistics Trust (SGX:M44U) reported its fourth quarter, as well as its full-year results for the financial year 2020/21 ended 31 March 2021.
In this post, you will read about my review of the logistics REIT’s latest set of results – particularly on its financial performance, debt and portfolio occupancy profile, along with its distribution payout to unitholders, to find out whether it has improved or deteriorated.
Let’s begin…
Financial Performance (Q4 FY2019/20 vs. Q4 FY2020/21, and FY2019/20 vs. FY2020/21)
In this section, I will be taking a look at the REIT’s financial results both on a quarter-on-quarter (q-o-q) basis (i.e. Q4 FY2019/20 ended 31 March 2020 vs. Q4 FY2020/21 ended 31 March 2021), as well as on a year-on-year (y-o-y) basis (i.e. FY2019/20 ended 31 March 2020 vs. FY2020/21 ended 31 March 2021):
Q4 FY2019/20 vs. Q4 FY2020/21:
| Q4 FY2019/20 | Q4 FY2020/21 | % Variation | |
| Gross Revenue (S$’mil) | S$128.1m | S$157.0m | +22.6% |
| Property Operating Expenses (S$’mil) | S$13.3m | S$20.3m | +52.6% |
| Net Property Income (S$’mil) | S$114.7m | S$136.7m | +19.1% |
| Distributable Income to Unitholders (S$’mil) | S$77.8m | S$92.6m | +18.9% |
On a q-o-q basis, the REIT’s top- and bottom-line both saw improvements – the 22.6% q-o-q jump in its gross revenue can be attributed to contributions from its existing properties, acquisitions in Vietnam, South Korea, Japan, Australia, and China completed in FY2019/20, as well as in FY2020/21, along with the completed redevelopment of Mapletree Ouluo Logistics Park Phase 2.
Property operating expenses, as a result of the inclusion of property expenses from the new acquisitions in FY2019/20 and FY2020/21, as well as the recognition of allowance for doubtful receivables, spiked by 52.6% compared to the same time period last year.
Despite of that, the REIT’s net property income still went up by 19.1% q-o-q to S$136.7m (Q4 FY2019/20: S$114.7m.)
FY2019/20 vs. FY2020/21:
| FY2019/20 | FY2020/21 | % Variation | |
| Gross Revenue (S$’mil) | S$490.8m | S$561.1m | +14.3% |
| Property Operating Expenses (S$’mil) | S$52.2m | S$62.0m | +18.8% |
| Net Property Income (S$’mil) | S$438.5m | S$499.1m | +13.8% |
| Distributable Income to Unitholders (S$’mil) | S$301.7m | S$333.1m | +10.4% |
Looking at the logistics REIT’s financial performance on a y-o-y basis, again, its statistics for the current financial year under review (i.e. FY2020/21) have recorded improvements, which is good to note.
Its gross revenue have went up by 14.3% compared to last year, due to contributions from its existing properties, acquisitions in Malaysia, Vietnam, South Korea, Japan, Australia, and China completed in FY2019/20 as well as in FY2020/21, along with the completed redevelopment of Mapletree Ouluo Logistics Park Phase 2.
With the inclusion of new properties in the REIT’s portfolio, as well as the recognition of allowance for doubtful receivables, its property expenses went up by 18.8% compared to last year.
Finally, the REIT’s net property income, along with its distributable income to unitholders, increased by 13.8% and 10.4% respectively.
Debt Profile (Q3 FY2020/21 vs. Q4 FY2020/21, and FY2019/20 vs. FY2020/21)
Next, let us take a look at the REIT’s latest set of debt profile, where I will be comparing its latest debt profile (for Q4 FY2020/21 ended 31 March 2021) against that recorded in the previous quarter (i.e. Q3 FY2020/21 ended 31 December 2020), as well as against the previous financial year (i.e. FY2019/20 ended 31 March 2020) to find out if it has improved or deteriorated:
Q3 FY2020/21 vs. Q4 FY2020/21:
| Q3 FY2020/21 | Q4 FY2020/21 | |
| Aggregate Leverage (%) | 36.8% | 38.4% |
| Interest Coverage Ratio (times) | 5.0x | 5.1x |
| Average Term to Debt Maturity (years) | 3.8 years | 3.8 years |
| Average Cost of Debt (%) | 2.2% | 2.2% |
My Thoughts: Not much changes compared to the previous quarter. Even though its aggregate leverage edged up slightly to 38.4% (as at 31 March 2021), but it is still a good distance (and plenty of debt headroom) away from the regulatory level of 50.0%, for the REIT to make further yield-accretive acquisitions as and when an opportunity to do so arises.
FY2019/20 vs. FY2020/21:
| FY2019/20 | FY2020/21 | |
| Aggregate Leverage (%) | 39.3% | 38.4% |
| Interest Coverage Ratio (times) | 4.9x | 5.1x |
| Average Term to Debt Maturity (years) | 4.1 years | 3.8 years |
| Average Cost of Debt (%) | 2.5% | 2.2% |
My Thoughts: Looking at its debt profile on a y-o-y basis, it has actually improved – particularly, its aggregate leverage have come down by 0.9 percentage points (pp) to 38.4% (as at 31 March 2021), and its average cost of debt have also fell by 0.3pp to 2.2%. With that, its interest coverage ratio have improved to 5.1x.
Portfolio Occupancy Profile (Q3 FY2020/21 vs. Q4 FY2020/21, and FY2019/20 vs. FY2020/21)
Similar to how I have reviewed the REIT’s debt profile in the previous section, I will also be looking at the REIT’s portfolio occupancy profile by comparing the statistics reported for the current quarter under review (i.e. Q4 FY2020/21) against the previous quarter three months ago (i.e. Q3 FY2020/21), as well as against the previous year (i.e. FY2019/20):
Q3 FY2020/21 vs. Q4 FY2020/21:
| Q3 FY2020/21 | Q4 FY2020/21 | |
| Portfolio Occupancy (%) | 97.1% | 97.5% |
| Rental Reversion (%) | +1.6% | +2.4% |
| Portfolio WALE (years) | 3.7 years | 3.6 years |
My Thoughts: Three months on, I am happy to note that the REIT’s portfolio occupancy profile have improved – particularly in terms of its portfolio occupancy and also the fact that in the current quarter under review, its rental reversion (for new and expiring leases) not only continued to remain in a positive territory, but it even improved compared to the rental reversion reported in the previous quarter.
FY2019/20 vs. FY2020/21:
| FY2019/20 | FY2020/21 | |
| Portfolio Occupancy (%) | 98.0% | 97.5% |
| Rental Reversion (%) | +2.0% | +2.4% |
| Portfolio WALE (years) | 4.3 years | 3.6 years |
My Thoughts: No doubt its portfolio occupancy and its portfolio WALE have weakened slightly, but in my personal opinion, they still remain resilient. As such, there’s no cause for concern here.
Distribution Per Unit
For the current quarter under review, the REIT have declared a distribution payout of 2.161 cents/unit – a 5.5% increase compared to a payout of 2.048 cents/unit declared in the same time period last year.
If you are a unitholder of the REIT, here are the dates to take note of:
Ex-Dividend: 28 April 2021
Record Date: 29 April 2021
Payout Date: 10 June 2021
Finally, on a full-year basis, the REIT’s distribution payout increased by 2.3% to 8.326 cents/unit, compared to 8.142 cents/unit in the previous financial year (i.e. FY2019/20.)
Closing Thoughts
As a unitholder, I am happy to note of all the positives in the REIT’s financial performance, debt and portfolio occupancy profile, as well as its distribution payout to unitholders.
The only slight negative is its portfolio occupancy profile on a y-o-y basis – but its still remains resilient, and something I am comfortable with as a unitholder of the blue-chip logistics REIT.
With that, I have come to the end of my review of Mapletree Logistics Trust’s latest results for the fourth quarter, and for the full-year 2020/21 ended 31 March 2021. I hope you have found the information presented within useful.
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Disclaimer: At the time of writing, I am a unitholder of Mapletree Logistics Trust.
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