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Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

2Q FY2019 vs 2Q FY18/19

Total property income for 2Q FY2019 increased by INR237 million (10%) to INR2.6 billion. This was mainly due to:

  • income from Anchor building at ITPB, which was completed in May 2019;
  • incremental income from aVance Pune, which was leased out in phases after it was acquired in February 2017; and
  • positive rental reversions.

In SGD terms, total property income increased by 11% to S$49.6 million. The SGD remained stable against the INR over the same period last year.

Total property expenses decreased by 12% to INR545 million (S$10.6 million) mainly due to a one-off provision for water supply and sanitary connection charges in ITPB in 2Q FY18/19, which was partially offset by a one-off gain from the scrap sale of the Dedicated Power Plant ("DPP") in 2Q last year.

Net property income for 2Q FY2019 increased by 18% to INR2.0 billion and S$39.0 million in both INR and SGD terms respectively due to above factors (excluding one-off item for total property expenses, net property income would have increased by 14%).

Trustee-manager's fees increased by INR22 million (13%) to INR197 million (S$3.8 million), which is in-line with higher net property income and portfolio value as of 30 September 2019.

Other operating expenses increased by INR61 million to INR104 million (S$2.0 million) mainly due to provision for Singapore GST during the quarter.

Finance costs increased by INR144 million (30%) to INR619 million (S$12.0 million) mainly due to an increase in borrowings for investments into Arshiya, AURUM IT SEZ, aVance 5 & 6, aVance A1 & A2 and BlueRidge 3 via construction funding.

Interest income increased by INR101 million (22%) or S$1.7 million (19%) mainly due to interest income pertaining to construction funding for Arshiya, AURUM IT SEZ, aVance 5 & 6, aVance A1 & A2 and BlueRidge 3.

Realised gain on derivative financial instruments for 2Q FY2019 of INR117 million (S$2.3 million) arose mainly from gains from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore and settlement of currency swaps on SGD-denominated loans.

Realised exchange loss for 2Q FY2019 of INR105 million (S$2.0 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.

As a result, ordinary profit before tax was INR1.7 billion in 2Q FY2019, an increase of 35% as compared to INR1.2 billion in 2Q FY18/19. In SGD terms, ordinary profit before tax increased by 33% to S$32.3 million.

Income tax expenses increased by INR146 million (S$2.7 million) mainly due to lower income tax of INR181 million arising from the merger of VITP Private Limited and Flagship Developers Private Limited in 2Q FY18/19. This was partially offset by higher income tax this quarter as a result of increased net property income and net interest income.

Distribution adjustments:

  • Current income tax expenses of INR290 million (S$5.6 million).
  • Trustee-manager fees of INR97 million (S$1.9 million) to be paid in units. 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.
  • Realised loss on settlement of loans of INR16 million (S$0.3 million) was deducted 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.
  • Income due to non-controlling interests of INR97 million (S$1.9 million) is deducted from income available for distribution.

Income available for distribution for 2Q FY2019 increased by 16% to INR1.4 billion, mainly due to higher net property income and a reduction in the MAT. This was partially offset by Singapore GST provision. In SGD terms, income available for distribution increased by 16% to S$26.4 million.

Income available for distribution per unit for 2Q FY2019 was INR1.30, or 2.53 S₵. DPU was INR1.17 or 2.28 S₵ after retaining 10% of income available for distribution, representing an increase of 16% over 2Q FY18/19 in INR terms and 15% in SGD terms.

 

YTD FY2019 vs YTD FY18/19

Total property income for the 6 months ended 30 September 2019 ("YTD FY2019") increased by INR507 million (11%) to INR5.1 billion. This was mainly due to income contribution of INR479 million (S$9.3 million) from:

  • income from Anchor building at ITPB, which was completed in May 2019;
  • incremental income from aVance Pune which leased out in phases; and
  • positive rental reversions.

In SGD terms, total property income increased by 10% to S$98.8 million. The SGD appreciated by about 1% against the INR over the same period last year.

Total property expenses for YTD FY2019 decreased by 5% to INR1.1 billion (S$22.1 million) mainly due to a one-off provision for water supply and sanitary connection charges in ITPB for the 6 months ended 30 September 2018 ("YTD FY18/19"). This was partially offset by a one-off gain from the scrap sale of the DPP in YTD FY18/19 and higher property management fees and other property operating expenses on account of the new properties in YTD FY2019.

Net property income for YTD FY2019 grew by 17% to INR3.9 billion. In SGD terms, net property income grew by 15% to S$76.8 million (excluding one-off item for total property expenses, net property income would have increased by 13%).

Trustee-manager's fees increased by INR44 million (13%) to INR392 million (S$7.6 million), in line with higher net property income and portfolio value as of 30 September 2019.

Other operating expenses increased by INR112 million to INR179 million (S$3.5 million) mainly due to provision for Singapore GST during the period.

Finance costs increased by INR343 million (39%) to INR1.2 billion (S$23.6 million) mainly due to an increase in borrowing levels. Total borrowings increased due to additional loans taken to invest in Arshiya, AURUM IT SEZ, aVance 5 & 6, aVance A1 & A2 and BlueRidge 3 via construction funding.

Interest income increased by INR495 million (S$9.3 million) mainly due to interest income pertaining to construction funding for Arshiya, AURUM IT SEZ, aVance 5 & 6, aVance A1 & A2 and BlueRidge 3.

Realised gain on derivative financial instruments for YTD FY2019 of INR116 million (S$2.3 million) arose from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore and settlement of currency swaps on SGD-denominated loans .

Ordinary profit before tax increased by 37% to INR3.3 billion. In SGD terms, ordinary profit before tax increased by 35% to S$64.7 million.

Income tax expenses increased by INR200 million (S$3.7 million) mainly due to lower income tax in YTD FY18/19 arising from the merger of VITP Private Limited and Flagship Developers Private Limited. This was partially offset by higher income tax this year as a result of increased net property income and net interest income.

Distribution adjustments:

  • Current income tax expense of INR714 million (S$13.9 million).
  • Trustee-manager fees of INR192 million (S$3.7 million) to be paid in units. 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.
  • Realised gain on settlement of loans of INR60 million (S$1.2 million) was deducted 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 INR180 million (S$3.5 million) is deducted from income available for distribution.

Income available for distribution for YTD FY2019 increased by 23% to INR2.6 billion. In SGD terms, income available for distribution increased by 21% to S$50.1 million.

Income available for distribution per unit for YTD FY2019 was INR2.47, or 4.81 S₵. DPU was INR2.22 or 4.33 S₵ after retaining 10% of income available for distribution, representing an increase of 22% over YTD FY18/19 in INR terms and 21% in SGD terms.

 

2Q FY2019 vs 1Q FY2019

Total property income for 2Q FY2019 increased slightly to INR2.6 billion (S$49.6 million) mainly due to incremental income contribution from Anchor building which was completed in May 2019.

Total property expenses for 2Q FY2019 decreased by 7% to INR545 million (S$10.6 million) mainly due to higher other property operating expenses across the properties in 1Q FY2019.

As a result, net property income for 2Q FY2019 increased by 4% to INR2.0 billion. In SGD terms, net property income increased by 3% to S$39.0 million.

Income available for distribution increased by 12% to INR1.4 billion, mainly due to higher net property income and a reduction in the MAT. In SGD terms, income available for distribution increased by 11% to S$26.4 million.

Income available for distribution per unit for 2Q FY2019 was INR1.30, or 2.53 S₵. DPU was INR1.17 or 2.28 S₵ after retaining 10% of income available for distribution, representing an increase of 11% over 1Q FY2019 in both INR terms and SGD terms.

 

Commentary

Based on the market research report by CBRE South Asia Pvt Ltd ("CBRE") for the quarter ended 30 September 2019, some of the key highlights (compared to quarter ended 30 June 2019) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy decreased marginally to 11.0%, from 12.5% last quarter, while rental values increased slightly. CBRE expects rental values to increase over the next few quarters due to sustained demand.

Chennai

  • In Old Mahabalipuram Road (the micro-market where ITPC is located), vacancy decreased to 4.7%, from 4.8% last quarter, while rental values remained stable over the same time period. CBRE expects rental values to grow in the coming quarters due to limited supply in this micro-market. In Grand Southern Trunk (the micro-market where CyberVale is located), the vacancy decreased to 6.1%, from 6.9% last quarter, while rental values remained stable. CBRE expects rental values in Grand Southern Trunk to remain largely stable over the coming quarters.

Hyderabad

  • In IT Corridor I9 (the micro-market where The V, CyberPearl and aVance Hyderabad are located), vacancy increased to 4.0% from 2.7% last quarter, due to the lower absorption over the same period, while rents increased slightly. With sustained demand for space, CBRE expects rental values in IT Corridor I to increase marginally in the coming quarters.

Pune

  • In Hinjawadi (the micro-market where aVance Pune is located), vacancy increased marginally to 6.6%, from 6.4% last quarter, while rents remained stable. CBRE expects rental values in Hinjawadi 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.

Notes
  1. Includes HITEC City and Madhapur.