Global Logistic 2Q earnings fall 38% on non-operating forex losses

Mainboard-listed Global Logistic Properties (GLP) reported on Tuesday that its earnings for the second quarter of financial year 2015 fell 38 per cent to US$89 million compared to the same period a year ago, on US$54 million of one-time foreign exchange losses.

The company said the forex losses were in Japan and Brazil and related to the contribution of assets into its fund management platform. GLP noted that the losses were not related to its ongoing operations but resulted from the fact that it reports in US dollars but has operations in the local currency. Affected by this, earnings for the first six months to 30 September were down 23 per cent to US$269 million compared to the year-ago period.

Stripping out the forex losses, GLP's pro-forma earnings for the second quarter rose 11 per cent year-on-year to US$132 million. Its pro-forma earnings for the first half-year were up 12 per cent to US$319 million, driven by strong leasing in China and a recent portfolio acquisition in Brazil.

Revenue for the group - which provides modern logistics facilities in China, Japan and Brazil - jumped 32 per cent to US$193 million for the quarter. For the first half-year, revenue rose 25 per cent to US$362 million.

GLP said it saw strong operational momentum. New and expansion leases grew by 55 per cent to 1.5 million square metres. Led by customer demand, GLP commenced US$1.5 billion of development starts across China, Japan and Brazil, up 160 per cent year on year.

The company also said that its US$13.2 billion fund management platform continued to register strong growth, with fund fees growing 87 per cent year-on-year in the first half-year. Last week GLP announced an injection of an additional US$2.5 billion of assets from Japan and Brazil into the platform, which it said will boost its return-on-equity in the longer term.

GLP also announced that co-founder Jeffrey Schwartz, 55, will be taking time off from work to focus on his health. He will, however, remain chairman of the executive committee and continue to be involved in strategic decisions.

GLP said fellow co-founder and chief executive officer, Ming Mei, will continue to lead the company, supported by a strong and deep management team that have worked together for over 10 years. GLP's growth strategy and expansion plans remain the same.