Mapletree Logistics Trust’s DPU Dips Slightly to S$0.09003 for FY2024: 5 Highlights from the Logistics REIT’s Earnings

Royston Yang
·5-min read
Mapletree Benoi Logistics Hub
Mapletree Benoi Logistics Hub

Mapletree Logistics Trust (SGX: M44U), or MLT, is the third and final Mapletree REIT to report its fiscal 2024 (FY2024) earnings ending 31 March 2024.

Last week, Mapletree Industrial Trust (SGX: ME8U) and Mapletree Pan Asia Commercial Trust (SGX: N2IU) both reported a year-on-year increase in their distribution per unit (DPU) for the fourth quarter of FY2024 (4Q FY2024).

MLT, however, saw its DPU slip slightly for both 4Q FY2024 and FY2024 because of higher finance costs and a strong Singapore dollar.

Here are five things that investors need to know about the logistics REIT’s latest earnings report.

A mixed set of results

For 4Q FY2024, MLT saw gross revenue inch up 1.2% year on year to S$181 million while net property income (NPI) edged up 0.6% year on year to S$155.3 million.

The higher revenue was attributed to better contributions from existing properties coupled with acquisitions completed during the fiscal year.

Currency headwinds put a dampener on the REIT’s results, though.

On a constant currency basis, both revenue and NPI would have grown by 3.6% and 3%, respectively, for 4Q FY2024.

DPU fell by 2.5% year on year to S$0.02211 as the total number of issued units rose 3.7% year on year to nearly five billion.

For FY2024, gross revenue increased by 0.4% year on year to S$733.9 million with NPI staying flat year on year at S$634.9 million.

DPU for FY2024 slipped slightly to S$0.09003 from S$0.09011 a year ago.

Healthy operating metrics despite China’s challenges

MLT managed to turn in an admirable set of operating metrics despite reporting tough conditions in China.

Portfolio occupancy as of 31 March 2024 stood at 96%, slightly higher than the 95.9% reported three months ago.

The logistics REIT also reported a positive rental reversion of 2.9% for the quarter, lower than the previous quarter’s 3.8%.

Positive rental reversions of 2.6% to 11.1% were achieved across all of MLT’s territories except for China which logged a negative reversion of 10%.

Excluding China, the weighted average rental reversion for leases renewed would have been 7.1%.

Stable debt metrics with a high level of fixed-rate debt

Moving on to the REIT’s debt metrics, MLT’s aggregate leverage stood at 38.9% as of 31 March 2024.

This level of gearing was around 2.1 percentage points higher than a year ago and was because of additional debt taken on to finance acquisitions and asset enhancement initiatives (AEIs).

The REIT’s weighted average annualised interest rate stayed constant at 2.7% while the interest coverage ratio remained healthy at 3.7 times.

MLT has a well-spread-out debt maturity profile with not more than 21% of its total loans coming due in any fiscal year.

Around 23% of its debt is due in FY2030 and beyond.

84% of MLT’s debt is pegged to fixed rates but the manager warned that replacement loans and hedges will be at rates significantly higher than existing rates.

Hence, there is still a good chance that finance costs may continue climbing in the near term.

Well-spread-out tenant and lease profile

MLT boasts a well-staggered lease expiry profile for its portfolio with a maximum of around 30% of leases coming due in any fiscal year.

The REIT’s weighted average lease expiry by net lettable area stood at three years.

MLT also has 915 tenants that are serving mainly consumer sectors with the top tenant, CWT, contributing just 4% of gross revenue.

The REIT’s top 10 tenants made up around 22% of total gross revenue, attesting to how well spread out its tenant profile is.

Active capital recycling

The manager of MLT has been very active in capital recycling during FY2024.

Over S$1.1 billion in acquisitions were announced or completed in the previous fiscal year, helping to add 12 modern, Grade A assets to the portfolio.

Four recent acquisitions in New Delhi, Kuala Lumpur, Ho Chi Minh City and Hanoi should help the REIT to capture growing demand from increased consumption and help to deepen the REIT’s footprint in these countries.

MLT is also trying to amalgamate two land parcels in Subang Jaya, Malaysia, at an estimated development cost of S$173 million.

The REIT manager is seeking approval from the authorities and the expected completion date is for the first half of 2028.

On the divestment front, MLT sold off a total of nine properties in FY2024 worth more than S$200 million at an average premium to their valuations of nearly 13%.

By selling off these assets, the manager can then recycle the capital into high-quality, better-yielding properties to help rejuvenate the portfolio.

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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust.

The post Mapletree Logistics Trust’s DPU Dips Slightly to S$0.09003 for FY2024: 5 Highlights from the Logistics REIT’s Earnings appeared first on The Smart Investor.

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