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Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

1Q FY17/18 vs 1Q FY16/17

Total property income for the quarter ended 30 June 2017 ("1Q FY17/18") increased by 22% to ₹2.2 billion mainly due to income contribution of ₹315 million (S$6.8 million) from:

  • Victor, which was completed in June 2016;
  • BlueRidge 2, which was acquired in February 2017;
  • and aVance 4, which was acquired in April 2017.

In addition, positive rental reversions also contributed to the increase. In SGD terms, total property income increased by 30% to S$46.7 million. The SGD depreciated by 6% against the INR over the same period last year.

Total property expenses for 1Q FY17/18 increased by 23% to ₹754 million (S$16.3 million) mainly due to:

  • property expenses of ₹109 million (S$2.4 million) from addition of new properties; and
  • a one-off settlement amounting to ₹32 million (S$0.7 million) with a tenant at Park Square, ITPB as part of on-going initiative to revamp and refresh the tenant mix of the mall ("Park Square Initiative").

Net property income for 1Q FY17/18 increased by 21% to ₹1.4 billion due to the above factors. In SGD terms, net property income grew by 29% to S$30.4 million.

Finance costs increased by ₹40 million (12%) to ₹378 million (S$8.2 million) mainly due to increase in borrowing levels. Total loans increased by 13% from S$414.0 million in 1Q FY16/17 to S$469.4 million in 1Q FY17/18 on loans taken for acquisition of BlueRidge 2, aVance 4 and the development of Atria.

Interest income decreased by ₹109 million (69%) or S$2.2 million (67%) mainly due to lower interest income pertaining to BlueRidge 2 Debentures, which was treated as inter-company income after acquisition, and hence, was eliminated on consolidation. Cash reserves were also used to partially fund the acquisition of BlueRidge 2 thereby lowering the net interest cost.

Realised loss on derivative financial instruments for 1Q FY17/18 of ₹48 million (S$1.0 million) arose from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore. The Trust maintains a policy of hedging distribution as it is earned, by entering into forward contracts to be settled at each 6-monthly distribution.

As a result, ordinary profit before tax was ₹875 million in 1Q FY17/18, a decrease of 2% as compared to ₹896 million in 1Q FY16/17. In SGD terms, ordinary profit before tax increased by 4% to S$18.9 million.

Income tax expenses decreased by ₹75 million (34%) or S$1.3 million (29%) mainly due to:

  • recognition of deferred tax assets of ₹84 million (S$1.8 million) at BlueRidge 2 mainly from unabsorbed capital allowance;
  • recognition of MAT credits of ₹67 million (S$1.4 million) at ITPB and ITPC due to tax exemption benefits; and
  • offset by higher current income tax from higher net property income.

Distribution adjustments:

  • Current income tax expenses of ₹256 million (S$5.5 million).
  • Trustee-manager fees to be paid in units at ₹67 million (S$1.5 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.
  • Income due to non-controlling interests of ₹60 million (S$1.3 million) is deducted from income available for distribution.

Income available for distribution for 1Q FY17/18 decreased by 9% to ₹626 million, mainly due to ₹80 million from realised loss on settlement of foreign exchange forward contracts and the Park Square Initiative. In SGD terms, income available for distribution decreased by 3% to S$13.5 million.

Income available for distribution per unit for 1Q FY17/18 was ₹0.67, or 1.45 S₵. DPU was ₹0.60 or 1.31 S₵ after retaining 10% of income available for distribution. This amounts to a decrease of 10% over 1Q FY16/17 in INR terms, and a decrease of 4% in SGD terms. Income to be distributed (DPU) would have been 1.37 S₵, an increase of 1%, if the one-off settlement with a tenant at Park Square is excluded.

 

1Q FY17/18 vs 4Q FY16/17

Total property income for 1Q FY17/18 increased by 4% to ₹2.2 billion mainly due to contributions from BlueRidge 2 and aVance 4 amounting to ₹106 million (S$2.3 million). In SGD terms, total property income increased by 6% to S$46.7 million. The SGD depreciated by 2% against the INR over the previous quarter.

Total property expenses for 1Q FY17/18 increased by 5% to ₹754 million (S$16.3 million) mainly due to:

  • property expenses of ₹48 million (S$1.0 million) from addition of new properties; and
  • a one-off settlement amounting to ₹32 million (S$0.7 million) due to the Park Square Initiative

As a result, net property income for 1Q FY17/18 increased by 3% to ₹1.4 billion. In SGD terms, net property income increased by 5% to S$30.4 million.

Realised loss on derivative financial instruments for 1Q FY17/18 of ₹48 million (S$1.0 million) arose from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore.

Income available for distribution decreased by 16% to ₹626 million, mainly due to realised loss on settlement of foreign exchange forward contracts and the Park Square Initiative. In SGD terms, income available for distribution decreased by 15% to S$13.5 million.

Commentary

Based on the market research report by CBRE South Asia Pvt Ltd ("CBRE") for the quarter ended 30 June 2017, some of the key highlights include:

Bangalore

  • In Whitefield (the micro-market where ITPL is located), vacancy rates decreased from 8.9% in the preceding quarter to 7.7% this quarter. Consequently, this micro-market witnessed rental growth of 2-3% quarter-on-quarter. With limited supply in this micro-market, CBRE expects rental values to further increase over the next few quarters.

Chennai

  • In Old Mahabalipuram Road ("OMR", the micro-market where ITPC is located), vacancy rates decreased from 7.8% in the preceding quarter to 6.0% this quarter. With limited supply in this micro-market, CBRE expects rental values to further increase in 2017. In Grand Southern Trunk ("GST", the micro-market where CyberVale is located), vacancy rates decreased marginally from 5.9% to 5.2% due to a lack of new supply. CBRE expects rental values in GST to remain largely stable in the new few quarters.

Hyderabad

  • In IT Corridor10 (the district where The V, CyberPearl and aVance are located), vacancy rates remained stable at 4.7%. With a sustained demand for space, CBRE expects rental values in IT Corridor to improve in 2017.

Pune

  • In Hinjewadi (the micro-market where BlueRidge 2 is located), vacancy rates decreased from 9.8% in the preceding quarter to 8.9% this quarter due to a lack of new supply in the micro-market. With limited supply in this micro-market, CBRE expects rental values to increase marginally over the next few 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. Besides investing in quality IT parks, a-iTrust is seeking opportunities to expand into the fast-growing logistics sector by acquiring investment-grade warehouses. The Indian logistics sector is supported by healthy growth in the Indian economy and other favourable macro factors, including Goods and Services Tax reform and rapid growth in e-commerce. 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.

Notes
  1. Includes Hitec City, Madhapur, Kondapur, Gachibowli and Kavuri Hills.