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Summary of Results
Consolidated Income Statement
Statement of Comprehensive Income
Consolidated Balance Sheet (Group)
Review of performance
1Q FY18/19 vs 1Q FY17/18
Total property income for the quarter ended 30 June 2018 ("1Q FY18/19") increased by INR120 million (6%) to INR2.3 billion. This was mainly due to income contribution of INR303 million (S$6.0 million) from:
- incremental income from BlueRidge 2, which was leased out in phases after it was acquired in February 2017;
- income from Atria at The V, which was completed in September 2017;
- Arshiya Warehouses, which were acquired in February 2018;
- positive rental reversions; and
partially offset by lower utilities income of INR168 million (S$3.3 million) with the phasing out of the DPP in ITPB.
In SGD terms, total property income decreased by 3% to S$44.9 million. The SGD appreciated by about 8% against the INR over the same period last year.
Total property expenses for 1Q FY18/19 decreased by 21% to INR570 million (S$11.3 million) mainly due to lower utilities expenses with the phasing out of the DPP in ITPB, partially offset by property expenses from new properties.
Net property income for 1Q FY18/19 increased by 20% to INR1.7 billion due to the above factors. In SGD terms, net property income grew by 10% to S$33.6 million.
Trustee-manager's fees increased by INR35 million (25%) to INR173 million (S$3.5 million) in line with higher net property income and portfolio value as of 30 June 2018.
Finance costs increased by INR17 million (4%) to INR395 million (S$7.9 million) mainly due to an increase in borrowing levels. Bridging loans were taken in June 2018 towards investments in:
- AURUM IT SEZ, a 1.4 million sq ft IT park in Navi Mumbai, via construction funding ("AURUM Debentures"); and
- aVance 5 & 6, with a combined floor area of 1.8 million sq ft at aVance Business Hub, Hyderabad, via construction funding ("aVance Debentures").
Interest income increased by INR96 million (196%) or S$1.8 million (173%) mainly due to interest income pertaining to AURUM and aVance Debentures.
Realised gain on derivative financial instruments for 1Q FY18/19 of INR79 million (S$1.6 million) arose mainly from the refinancing of SGD-denominated loans that have been hedged into INR, and gains from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore.
Realised exchange loss for 1Q FY18/19 of INR134 million (S$2.7 million) arose mainly from settlement of SGD-denominated loan facilities. Realised exchange gain or loss is recognised when borrowings that are denominated in currencies other than the INR are settled.
As a result, ordinary profit before tax was INR1.2 billion in 1Q FY18/19, an increase of 35% as compared to INR875 million in 1Q FY17/18. In SGD terms, ordinary profit before tax increased by 25% to S$23.6 million.
Unrealised exchange gain for 1Q FY18/19 of INR46 million (S$0.9 million) relates mainly to the revaluation of SGD-denominated loans.
Income tax expenses increased by INR170 million (S$3.1 million) mainly due to:
- one-off recognition of deferred tax assets of INR84 million (S$1.8 million) at BlueRidge 2 in the previous year mainly from unabsorbed capital allowance; and
- higher current income tax of INR73 million (S$1.5 million) from higher net property income and interest income.
- Current income tax expenses of INR329 million (S$6.6 million).
- Trustee-manager fees to be paid in units at INR84 million (S$1.7 million). The Trusteemanager has elected to receive 50% of its base fee and performance fee in units and 50% in cash; hence 50% of the fees are added back to the income available for distribution.
- Realised loss on settlement of loans at INR48 million (S$1.0 million) was added back for distribution purpose. This pertains to refinancing of SGD-denominated loans that have not been hedged into INR. Exchange gain/loss is recognised when borrowings that are denominated in currencies other than the INR are revalued. The exchange gain/loss is realised when the borrowing matures, is prepaid, or swapped to INR denomination. Such exchange gain/loss does not affect cash flow.
- Income due to non-controlling interests of INR62 million (S$1.2 million) is deducted from income available for distribution.
Income available for distribution for 1Q FY18/19 increased by 48% to INR925 million, mainly due to higher net property income and interest income from investments in AURUM IT SEZ and aVance 5 & 6 via construction funding in June 2018. In SGD terms, income available for distribution increased by 36% to S$18.4 million.
Income available for distribution per unit for 1Q FY18/19 was INR0.89, or 1.78 S₵. DPU was INR0.80 or 1.60 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 33% over 1Q FY17/18 in INR terms and 23% in SGD terms.
1Q FY18/19 vs 4Q FY17/18
Total property income for 1Q FY18/19 decreased by 6% to INR2.3 billion (S$44.9 million) mainly on account of lower utilities income from the phasing out of the DPP in ITPB.
Total property expenses for 1Q FY18/19 decreased by 26% to INR570 million (S$11.3 million) mainly due to lower utilities expenses with the phasing out of the DPP in ITPB and a decrease in ad-hoc operation and maintenance expenses across the properties.
As a result, net property income for 1Q FY18/19 increased by 3% to INR1.7 billion. In SGD terms, net property income remained stable at S$33.6 million.
Income available for distribution increased by 4% to INR925 million, mainly due to higher net property income. In SGD terms, income available for distribution increased by 2% to S$18.4 million.
Based on the market research report by CBRE South Asia Pvt Ltd ("CBRE") for the quarter ended 30 June 2018, some of the key highlights (compared to quarter ended 31 March 2018) include:
- In Whitefield (the micro-market where ITPB is located), vacancy rates dropped marginally to 6.8%, from 6.9% last quarter, while rental values climbed approximately 2-3% on a q-o-q basis. CBRE expects rental values to increase over the next few quarters due to sustained demand.
- In Old Mahabalipuram Road ("OMR", the micro-market where ITPC is located), vacancy rates dropped marginally to 3.1%, from 3.2% last quarter, while rental values climbed 2.4% on a q-o-q basis. CBRE expects rental values to increase further in the coming quarters due to limited supply in this micro-market. In Grand Southern Trunk ("GST", the micro-market where CyberVale is located), rental values remained stable despite an increase in vacancy rates from 6.2% to 11.9% on a q-o-q basis. CBRE expects rental values in GST to remain largely stable over the coming quarters.
- In IT Corridor I10 (the district where The V, CyberPearl and aVance are located), rents remained stable on a q-o-q basis, despite a marginal increase in vacancy to 4.9%, from 4.4% last quarter. With sustained demand for space, CBRE expects rental values in IT Corridor I to improve in the coming quarters.
- In Hinjewadi (the micro-market where BlueRidge 2 is located), vacancy rates dropped to 11.5%, from 12.5% last quarter, while rental values remained stable. CBRE expects rental values in Hinjewadi to remain largely stable over the coming quarters.
The performance of a-iTrust is influenced by its tenants' business performance and outlook, condition of each city's real estate market and global economic conditions. a-iTrust will continue to focus on enhancing the competitiveness of its properties to distinguish itself from competitors, while maintaining financial discipline, and seeking growth opportunities.