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Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

3Q FY17/18 vs 3Q FY16/17

Total property income for the quarter ended 31 December 2017 ("3Q FY17/18") increased by 18% to ₹2.2 billion mainly due to income contribution of ₹313 million (S$6.6 million) from:

  • Victor, which was leased out in phases after development was completed in June 2016;
  • BlueRidge 2, which was acquired in February 2017;
  • aVance 4, which was acquired in April 2017; and
  • Atria at The V, which was completed in September 2017.

In addition, positive rental reversions and new leases also contributed to the increase. In SGD terms, total property income increased by 18% to S$46.5 million. The SGD remained stable against the INR over the same period last year.

Total property expenses for 3Q FY17/18 increased by 8% to ₹665 million (S$13.9 million) mainly due to property expenses from addition of new properties.

Net property income for 3Q FY17/18 increased by 23% to ₹1.6 billion due to the above factors. In SGD terms, net property income grew by 23% to S$32.6 million.

Finance costs increased by ₹53 million (15%) to ₹393 million (S$8.2 million) mainly due to increase in borrowing levels. Total loans increased by 15% from S$433.6 million in 3Q FY16/17 to S$498.8 million in 3Q FY17/18 on loans taken for acquisition of BlueRidge 2, aVance 4 and the development of Atria.

Interest income decreased by ₹155 million (73%) or S$3.2 million (73%) 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 interest income.

Realised gain on derivative financial instruments for 3Q FY17/18 of ₹97 million (S$2.0 million) arose mainly from the refinancing of a SGD-denominated loan that has been hedged into INR.

Realised exchange loss for 3Q FY17/18 of ₹77 million (S$1.6 million) arose mainly from settlement of a SGD-denominated loan facility. Realised exchange gain or loss is recognised when borrowings that are denominated in currencies other than the INR are settled. This is offset by realised gains from revaluation of cash balances not denominated in INR during the quarter.

As a result, ordinary profit before tax was ₹1.1 billion in 3Q FY17/18, an increase of 8% as compared to ₹999 million in 3Q FY16/17. In SGD terms, ordinary profit before tax increased by 8% to S$22.6 million.

Income tax expenses increased by ₹63 million (26%) or S$1.3 million (26%) mainly due to higher current income tax from higher net property income.

Distribution adjustments:

  • Current income tax expenses of ₹281 million (S$5.9 million).
  • Trustee-manager fees to be paid in units at ₹71 million (S$1.5 million). The Trustee-manager 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 ₹62 million (S$1.3 million) is deducted from income available for distribution.

Income available for distribution for 3Q FY17/18 increased by 15% to ₹812 million, mainly due to higher ordinary profit before tax. In SGD terms, income available for distribution increased by 16% to S$17.0 million.

Income available for distribution per unit for 3Q FY17/18 was ₹0.87, or 1.82 S₵. DPU was ₹0.79 or 1.64 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 15% over 3Q FY16/17 in both INR terms and SGD terms.

 

YTD FY17/18 vs YTD FY16/17

Total property income for the 9 months ended 31 December 2017 ("YTD FY17/18") increased by 18% to ₹6.5 billion. This was mainly due to incremental rental income of ₹865 million from Victor, BlueRidge 2, aVance 4 and Atria, which were completed/acquired in June 2016, February 2017, April 2017 and September 2017 respectively. Positive rental reversions also contributed to the increase. In SGD terms, total property income increased by 23% to S$138.2 million. The SGD depreciated by about 4% against the INR over the same period last year.

Total property expenses for YTD FY17/18 increased by 13% to ₹2.1 billion (S$43.6 million), mainly due to additional expenses arising from the addition of new properties to the portfolio.

As a result, net property income for YTD FY17/18 grew by 21% to ₹4.5 billion. In SGD terms, net property income grew by 26% to S$94.6 million.

Finance costs increased by ₹116 million (11%) or S$3.3 million (15%) mainly due to an increase in borrowing levels. Total loans increased due to additional loans taken to invest in BlueRidge 2, aVance 4 and the development of Atria.

Interest income decreased by ₹414 million (72%) or S$8.4 million (71%) 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 interest income.

Realised gain on derivative financial instruments for YTD FY17/18 of ₹49 million (S$1.0 million) arose from the refinancing of a SGD-denominated loan that has been hedged into INR, offset by 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.

Realised exchange loss for YTD FY17/18 of ₹77 million (S$1.6 million) arose mainly from settlement of a SGD-denominated loan facility. Realised exchange gain or loss is recognised when borrowings that are denominated in currencies other than the INR are settled. This is offset by realised gains from revaluation of cash balances not denominated in INR.

Ordinary profit before tax increased by 4% to ₹2.9 billion. In SGD terms, ordinary profit before tax increased by 8% to S$62.5 million.

Distribution adjustments:

  • Current income tax expense at ₹802 million (S$17.0 million).
  • Trustee-manager fees to be paid in units at ₹209 million (S$4.4 million). The Trustee-manager 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 ₹183 million (S$3.9 million) is deducted from income available for distribution.

Income available for distribution for YTD FY17/18 increased by 4% to ₹2.2 billion. In SGD terms, income available for distribution increased by 8% to S$46.2 million.

Income available for distribution per unit for YTD FY17/18 was ₹2.33, or 4.94 S₵. DPU was ₹2.10 or 4.45 S₵ after retaining 10% of income available for distribution.

 

3Q FY17/18 vs 2Q FY17/18

Total property income for 3Q FY17/18 increased marginally by 3% to ₹2.2 billion (S$46.5 million) on account of incremental contribution from Atria.

Total property expenses for 3Q FY17/18 remained stable at ₹665 million (S$13.9 million).

As a result, net property income for 3Q FY17/18 increased by 4% to ₹1.6 billion. In SGD terms, net property income increased by 3% to S$32.6 million.

Income available for distribution increased by 10% to ₹812 million, mainly due to higher net property income. In SGD terms, income available for distribution increased by 9% to S$17.0 million.

Commentary

Based on the market research report by CBRE South Asia Pvt Ltd ("CBRE") for the quarter ended 31 December 2017, some of the key highlights (compared to quarter ended 30 September 2017) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy rates dropped marginally to 7.2% this quarter, while rental values remained stable. CBRE expects rental values to increase over the next few quarters due to sustained demand.

Chennai

  • In Old Mahabalipuram Road ("OMR", the micro-market where ITPC is located), vacancy rates remained stable at 3.3% this quarter. While rental values also remained stable this quarter, 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), vacancy rates remained unchanged at 4.7%. CBRE expects rental values in GST, which were constant this quarter, to remain largely stable over the coming quarters.

Hyderabad

  • In IT Corridor I10 (the district where The V, CyberPearl and aVance are located), rents climbed 2-3% despite a slight increase in vacancy rates to 6.2%. With sustained demand for space, CBRE expects rental values in IT Corridor I to improve in the coming quarters.

Pune

  • In Hinjewadi (the micro-market where BlueRidge 2 is located), vacancy rates increased marginally to 8.6%, while rental values remained stable. CBRE expects rental values to remain stable in 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. 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 and Madhapur.