Global Logistic Properties (GLP) yesterday reported a 24.3 per cent drop in net profit for the first quarter, largely due to foreign-exchange losses and lower revaluation gains, compared with a year earlier.
Earnings for the three months to June 30 came in at US$202.9 million (S$274 million), down from US$268.1 million a year ago.
But core earnings, adjusted for non-recurring items, were up 7 per cent year on year, driven by growth in China operations and continued expansion of GLP's fund-management platform in Japan and the United States.
Revenue grew 8.6 per cent to US$206.6 million, largely due to the completion and stabilisation of development projects in China with increasing rents, an increase in management fee income from the inclusion of GLP US Income Partners II, and growth in development activities in Japan.
But the increase was partially offset by the ongoing rents adjustment in China, resulting from the transition of business tax to value-added tax regime, and the weakening of the Chinese yuan against the US dollar, with average rates decreasing by 6.5 per cent, said GLP.
AT A GLANCE
US$202.9 million (-24.3%)
US$206.6 million (+8.6%)
The group's share of operating results of associates and joint ventures increased from US$17 million to US$22.1 million, mainly due to completion of development activities of certain logistics facilities in Japan and the appreciation of the Japanese yen against the US dollar. Net finance costs also rose to US$70 million from US$13.8 million a year ago.
GLP said renewal leases signed in the first quarter rose 17 per cent year on year. Rent growth on renewed leases was 9.6 per cent globally, led by US and China. Customer retention remained stable at 71 per cent but slower leasing of development projects in China and Brazil led to a 1 per cent drop in GLP's average lease ratio, which stood at 91 per cent as of June 30.
Earnings per share slipped to 4.12 US cents from 5.38 US cents previously, while net asset value per share firmed to US$1.94, compared with US$1.87 as at March 31.
Looking ahead, GLP said it will maintain strong investment discipline and focus on markets with high demand and limited supply. During the first quarter, it started developments worth US$404 million, mainly in China, at locations with an average lease ratio of 87 per cent.
It expects to meet its global development targets for the current financial year and generate some US$200 million of development profit for the full year.
GLP shares yesterday eased two cents to $1.93.