GLP Q3 profit drops 7.3%; says reviewing non-binding proposals from several parties

Global Logistic Properties (GLP), the target of a buyout bid led by a Chinese private equity group, reported on Feb 9 a 7.3 per cent drop in net profit.
Global Logistic Properties (GLP), the target of a buyout bid led by a Chinese private equity group, reported on Feb 9 a 7.3 per cent drop in net profit.PHOTO: GLOBAL LOGISTIC PROPERTIES

SINGAPORE - Global Logistic Properties (GLP), the target of a buyout bid led by a Chinese private equity group, reported on Thursday (Feb 9) a 7.3 per cent drop in net profit to US$170.7 million (S$242.4 million) for its third quarter ended Dec 31, 2016.

The drop was due to a one-time syndication gain in the comparable period a year ago related to its first US portfolio and higher foreign exchange losses, said GLP.

On a core basis, after earnings were 22 per cent higher year on year, driven by higher asset values from growth in net operating income, growth in operations and the continued expansion of GLP's fund management platform.

Revenue for the quarter grew 16.9 per cent to US$232.5 million from a year ago, due mainly to the completion and stabilisation of development projects in China with increasing rents, revenue from financial services in China, and an increase in management fee income from its fund management platform.

Said GLP CEO Ming Z Mei: "Demand for GLP's logistics facilities remains robust globally, with new and renewal leases up 42 per cent year on year.

"New developments are proceeding at a healthy pace, in line with our projections, as we continue to maintain sound investment discipline while growing our portfolio. Our fund management platform continues to deliver strong performance and is a key area of growth going forward."

Earnings per share was 3.48 US cents for the quarter, down 7.4 per cent from 3.76 US cents a year ago.

GLP on Thursday also said it will be evaluating various non-binding proposals received from a number of parties in connection with its strategic review of options available for its business.

It added that its CEO and non-executive and non-independent director Fang Fenglei have recused themselves from all board discussions and decisions relating to the strategic review.

According to earlier media reports, Mr Fang's Beijing-based private equity firm, Hopu Investment Management, has submitted an offer for GLP together with Hillhouse Capital Management and GLP's CEO.

Blackstone Group and an investor group led by Warburg Pincus reportedly also made non-binding bids.