GLP profit soars 64% with gains in China, Japan

Logistics group's entry into US market also helps it chalk up $259m in earnings in Q3

Gobal Logistic Properties (GLP), a global provider of modern logistics facilities, said its third-quarter net profit rose by 63.8 per cent to US$184.2 million (S$258.7 million) on the back of higher earnings in China, development gains in Japan and its entry into the US market.

Revenue climbed by 11.1 per cent to US$198.9 million for the three months to Dec 31.

GLP chief executive Ming Z. Mei said demand for modern logistics facilities continues to be driven by long-term, structural trends in domestic consumption.

The group signed 2.4 million sq m of new and renewal leases in the quarter, up 22 per cent year on year. "Our fund-management platform continues to deliver solid results, increasing our return on equity," he said.

Earnings from China were up 50 per cent, driven by higher asset values, rent growth and continued lease-up of developments, while profit in Japan was up 34 per cent on more development completions.



    US$184.2 million (+63.8%)


    US$198.9 million (+11.1%)

GLP's average lease ratio remained unchanged quarter on quarter at 93 per cent, with customer retention ratio at 69 per cent, up from 63 per cent last quarter. GLP said 90 per cent of its portfolio is occupied by businesses geared towards domestic consumption, which remains relatively stable even in times of slower economic growth.

Same-property net operating income was strong across all of its markets as China, Japan, Brazil and the US registered gains of 7.1 per cent, 2.2 per cent, 7.2 per cent and 8.1 per cent, respectively.

GLP started US$826 million of new developments in the third quarter, meeting 55 per cent of its full-year development starts target of US$2.9 billion. It also completed US$516 million of developments with a value-creation margin of about 27 per cent. This translated to US$67 million of pre-tax development gains for GLP.

GLP said it has met 66 per cent of its full-year development completions target of US$2 billion and remains confident of meeting its full- year guidance as it continues to capture customer-driven demand.

The group acquired a 15.5 per cent stake in China Materials Storage and Transportation Development Co and will also establish a development joint venture, giving it access to the latter's land resources of more than 9 million sq m space.

GLP's fund-management revenue rose 19 per cent year-on-year to US$37 million. This comprised asset and property management fees of US$26 million and development fees of US$11 million from US$22 billion of invested capital.

Earnings per share rose to 3.76 US cents from 2.16 US cents.

GLP shares ended one cent higher at $1.63.

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A version of this article appeared in the print edition of The Straits Times on February 05, 2016, with the headline GLP profit soars 64% with gains in China, Japan. Subscribe