Mapletree's Q3 earnings lifted by higher revenue

Income available for distribution rises 1.1% to $44.2m

Higher revenue and lower property operating expenses boosted third-quarter earnings at Mapletree Commercial Trust (MCT).

It recorded a 1.1 per cent year-on-year rise in income available for distribution to $44.2 million for the three months to Dec 31.

Distribution per unit was 2.08 cents for the period, similar to a year earlier.

Gross revenue rose 1.2 per cent to $73.8 million, mainly due to contributions from VivoCity but partially offset by lower turnover from Mapletree Anson and PSA Building.

Revenue from VivoCity was $1.3 million, higher than in the same period a year earlier, thanks in part to higher rental income from new and renewed leases, including for newly created space at basements 1 and 2.

While shopper traffic fell 1.6 per cent in the third quarter, tenant sales rose 4.0 per cent, the trust's manager noted. Shopper traffic fell 1.9 per cent to 40.5 million for the nine months while tenant sales rose 2.5 per cent to $705.9 million.

Revenue for the PSA Building fell $0.3 million while that for Mapletree Anson was down $0.2 million, due to reduced occupancy in the quarter. The PSA Building was 94.3 per cent occupied at Dec 31, while Mapletree Anson's occupancy was 99.3 per cent.

  • AT A GLANCE

  • REVENUE: $73.8 million (+1.2%)

    NET PROPERTY INCOME: $56.6 million (+3.5%)

    INCOME AVAILABLE FOR DISTRIBUTION: $44.2 million (+1.1%)

    DISTRIBUTION PER UNIT: 2.08 cents (unchanged)

Property operating expenses fell 5.5 per cent year on year due to reduced utilities expenses and savings in advertising and promotion charges. As a result, net property income rose 3.5 per cent to $56.6 million for the quarter.

The gearing ratio was 36.3 per cent at Dec 31, down from 37.9 per cent a year earlier, while the average term-to-maturity of debt was 3.6 years compared with 3.0 years previously.

"Despite the higher cost of debt, interest coverage ratio remains at a healthy level of about 5.1 times," the manager said.

Retail rents are forecast to decline this year while office demand has been weak, the manager said.

"MCT's properties are located within commercial hubs that are expected to maintain their resilience. Barring any further downside risks, MCT's retail and office properties are expected to remain relatively stable."

Net asset value was $1.24 as at Dec 31, similar to March 31.

MCT units closed unchanged at $1.315 yesterday.

A version of this article appeared in the print edition of The Straits Times on January 28, 2016, with the headline 'Mapletree's Q3 earnings lifted by higher revenue'. Print Edition | Subscribe