GLP profit surges 46% in Q4 on fair-value gains

Higher fair-value gains from Chinese subsidiaries help boost GLP's bottom line.
Higher fair-value gains from Chinese subsidiaries help boost GLP's bottom line.PHOTO: GLOBAL LOGISTICS PROPERTIES

Higher revenue also helps lift quarterly profit to $210.7m, with full-year net profit up 48%

Higher revenue and fair-value gains from investment properties lifted fourth-quarter earnings for Global Logistic Properties (GLP).

The modern logistics facility provider yesterday posted a 45.7 per cent jump in net profit to US$152.7 million (S$210.7 million) for the three months ended March 31.

Revenue jumped 19.4 per cent to US$199.1 million, mainly owing to the completion and stabilisation of development projects in China with increasing rents and the inclusion of management fee income from its GLP US Income Partners I and GLP US Income Partners II funds, said the group.

The company's bottom line got a boost from higher fair-value gains of investment properties of subsidiaries in China.

It was also helped by a share of fair-value gains from investment properties of joint ventures in Japan and Brazil, compared with a share of fair-value loss from investment properties of joint ventures in Brazil in the same period last year.

Net profit for the full-year shot up 47.9 per cent to US$719.1 million, while revenue climbed 9.8 per cent to US$777.5 million.

Earnings per share for the quarter was 3.06 US cents, up from 2.01 US cents previously. Net asset value per share stood at US$1.87 as at March 31, up on the US$1.81 from the year before.

  • AT A GLANCE

  • FY NET PROFIT: US$719.1 million (+47.9%)

    FY REVENUE: US$777.5 million (+9.8%)

    DIVIDEND: 6 cents per share (+9%)

GLP develops, owns and manages a portfolio comprising 559 million sq ft of logistics facilities across China, Japan, the United States and Brazil.

The group has proposed a dividend of six cents per share, up from 5.5 cents last year.

"Against a more cautious macro-economic environment, the results highlight the value of our solutions and strong 'network effect'," said GLP chief executive Ming Z. Mei.

"GLP remains well-positioned to serve its customers in the current environment," he added. "We are confident in the long-term outlook of our markets and will maintain strong investment discipline with a focus on locations that are seeing good demand and limited supply."

Despite the solid showing, GLP shares sank 8.5 cents, or 4.5 per cent, to $1.82 yesterday.

DBS Vickers Securities analyst Derek Tan told The Straits Times that the more muted increase in the group's core earnings - while still strong - could have doused some of the enthusiasm.

"The management has also guided for a more modest growth profile going forward, in terms of new and completed developments," he noted, adding that the volatile market sentiment could have been a drag on the stock as well.

Mr Tan is maintaining a "buy" call on the stock, with a 12-month target price of $2.47, given the prospects of a "multi-year growth story despite near-term hiccups".

A version of this article appeared in the print edition of The Straits Times on May 20, 2016, with the headline 'GLP profit surges 46% in Q4 on fair-value gains'. Print Edition | Subscribe