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Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

2Q FY18/19 vs 2Q FY17/18

Total property income for the quarter ended 30 September 2018 (“2Q FY18/19”) increased by INR162 million (8%) to INR2.3 billion. This was mainly due to income contribution of INR321 million (S$6.3 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 INR170 million (S$3.3 million) with the phasing out of the DPP in ITPB.

In SGD terms, total property income decreased by 2% to S$44.9 million. The SGD appreciated by about 9% against the INR over the same period last year.

Total property expenses for 2Q FY18/19 decreased by 6% to INR620 million (S$11.9 million) mainly due to lower utilities expenses with the phasing out of the DPP in ITPB and a one-off gain from the scrap sale of the DPP, partially offset by higher property management fees and other property operating expenses on account of the new properties; and one-off provision for water supply and sanitary connection charges in ITPB.

Net property income for 2Q FY18/19 increased by 14% to INR1.7 billion due to the above factors. In SGD terms, net property income grew by 4% to S$32.9 million.

Trustee-manager's fees increased by INR30 million (21%) to INR175 million (S$3.4 million), in line with higher net property income and portfolio value as of 30 September 2018.

Finance costs increased by INR88 million (23%) to INR475 million (S$9.3 million) mainly due to an increase in borrowing levels for investments in:

  • AURUM IT SEZ, a 1.4 million sq ft IT park in Navi Mumbai, via construction funding (“AURUM Debentures”);
  • aVance 5 & 6, with a combined floor area of 1.8 million sq ft at aVance Business Hub, Hyderabad, via construction funding (“aVance Debentures 1”);
  • aVance A1 & A2, with a combined floor area of 1.9 million sq ft at aVance Business Hub 2, Hyderabad, via construction funding (“aVance Debentures 2”).

Interest income increased by INR401 million (S$7.9 million) mainly due to interest income pertaining to AURUM Debentures, aVance Debentures 1 and aVance Debentures 2.

Realised gain on derivative financial instruments for 2Q FY18/19 of INR28 million (S$0.5 million) arose mainly from gains from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore.

Realised exchange loss for 2Q FY18/19 of INR249 million (S$4.7 million) arose mainly from settlement of SGD-denominated loan. 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 2Q FY18/19, an increase of 24% as compared to INR990 million in 2Q FY17/18. In SGD terms, ordinary profit before tax increased by 15% to S$24.2 million.

Unrealised exchange gain for 2Q FY18/19 of INR599 million (S$11.6 million) relates mainly to the revaluation of SGD-denominated loans.

Income tax expenses decreased by INR61 million (S$1.6 million) mainly due to reversal of deferred tax liabilities and current income tax of INR181 million (S$3.5 million) arising from the merger of VITP Private Limited and Flagship Developers Private Limited; partially offset by higher current income tax of of INR112 million (S$2.2 million) from higher net property income and interest income.

Distribution adjustments:

  • Current income tax expenses of INR339 million (S$6.6 million).
  • Trustee-manager fees to be paid in units at INR86 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 INR259 million (S$4.9 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 INR69 million (S$1.4 million) is deducted from income available for distribution.

Income available for distribution for 2Q FY18/19 increased by 59% to INR1.2 billion, mainly due to increased net property income and higher interest income from investments in AURUM IT SEZ, aVance 5 & 6 and aVance A1 & A2 via construction funding in June, July and September 2018. In SGD terms, income available for distribution increased by 46% to S$22.9 million.

Income available for distribution per unit for 2Q FY18/19 was INR1.13, or 2.20 S₵. DPU was INR1.02 or 1.98 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 43% over 2Q FY17/18 in INR terms and 32% in SGD terms.

 

1H FY18/19 vs 1H FY17/18

Total property income for the 6 months ended 30 September 2018 (“1H FY18/19”) increased by INR283 million (7%) to INR4.6 billion. This was mainly due to income contribution of INR603 million (S$11.2 million) from:

  • incremental income from BlueRidge 2 which leased out in phases;
  • 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 INR321 million (S$6.3 million) with the phasing out of the DPP in ITPB.

In SGD terms, total property income decreased by 2% to S$89.8 million. The SGD appreciated by about 9% against the INR over the same period last year.

Total property expenses for 1H FY18/19 decreased by 14% to INR1.2 billion (S$23.3 million) mainly due to lower utilities expenses with the phasing out of the DPP in ITPB and a one-off gain from the scrap sale of the DPP, partially offset by higher property management fees and other property operating expenses on account of the new properties; and one-off provision for water supply and sanitary connection charges in ITPB.

Net property income for 1H FY18/19 grew by 17% to INR3.4 billion. In SGD terms, net property income grew by 7% to S$66.5 million.

Trustee-manager’s fees increased by INR66 million (23%) to INR348 million (S$6.9 million), in line with higher net property income and portfolio value as of 30 September 2018.

Finance costs increased by INR105 million (14%) to INR870 million (S$17.1 million) mainly due to an increase in borrowing levels. Total borrowings increased due to additional loans taken to invest in AURUM IT SEZ, aVance 5 & 6 and aVance A1 & A2 via construction funding.

Interest income increased by INR498 million (S$9.8 million) mainly due to interest income pertaining to AURUM Debentures, aVance Debentures 1 and aVance Debentures 2.

Realised loss on derivative financial instruments for 1H FY18/19 of INR108 million (S$2.1 million) arose from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore.

Ordinary profit before tax increased by 30% to INR2.4 billion. In SGD terms, ordinary profit before tax increased by 20% to S$47.8 million.

Distribution adjustments:

  • Current income tax expense at INR668 million (S$13.2 million).
  • Trustee-manager fees to be paid in units at INR170 million (S$3.4 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 INR306 million (S$5.9 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 INR131 million (S$2.6 million) is deducted from income available for distribution.

Income available for distribution for 1H FY18/19 increased by 54% to INR2.1 billion. In SGD terms, income available for distribution increased by 42% to S$41.3 million.

Income available for distribution per unit for 1H FY18/19 was INR2.02, or 3.98 S₵. DPU was INR1.82 or 3.58 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 38% over 1H FY17/18 in INR terms and 27% in SGD terms.

2Q FY18/19 vs 1Q FY18/19

Total property income for 2Q FY18/19 remained stable at INR2.3 billion (S$44.9 million).

Total property expenses for 2Q FY18/19 increased by 9% to INR620 million (S$11.9 million) mainly due to higher property management fees, other property operating expenses, and one-off provision for water supply and sanitary connection charges in ITPB partially offset by lower utilities expenses due to increase in solar supply in ITPB with lower cost per unit and a one-off gain from the scrap sale of the DPP.

As a result, net property income for 2Q FY18/19 remained stable at INR1.7 billion. In SGD terms, net property income decreased by 2% to S$32.9 million.

Income available for distribution for 2Q FY18/19 increased by 27% to INR1.2 billion, mainly due to higher interest income from investments in AURUM IT SEZ, aVance 5 & 6 and aVance A1 & A2 via construction funding in June, July and September 2018. In SGD terms, income available for distribution increased by 24% to S$22.9 million.

Income available for distribution per unit for 2Q FY18/19 was INR1.13, or 2.20 S₵. DPU was INR1.02 or 1.98 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 27% over 1Q FY18/19 in INR terms and 24% in SGD terms.

 

Commentary

Based on the market research report by CBRE South Asia Pvt Ltd (“CBRE”) for the quarter ended 30 September 2018, some of the key highlights (compared to quarter ended 30 June 2018) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy rates dropped marginally to 6.4%, from 6.8% last quarter, while rental values remained stable. Similarly, CBRE expects rental values to remain stable over the next few quarters due to sustained demand and supply levels.

Chennai

  • In Old Mahabalipuram Road (“OMR”, the micro-market where ITPC is located), vacancy rates increased to 3.7%, from 3.1% last quarter, while rental values remained stable. Nonetheless, CBRE expects rental values to increase slightly over 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 stable at 11.9%. Likewise, rental values remained stable due to limited leasing activity. CBRE expects rental values in GST to remain largely stable over the coming quarters.

Hyderabad

  • In IT Corridor I10 (the micro-market where The V, CyberPearl and aVance are located), rents remained stable on a q-o-q basis, despite a marginal increase in vacancy to 5.6%, from 4.9% last quarter. With sustained demand for space, CBRE expects rental values in IT Corridor I to improve going forward.

Pune

  • In Hinjewadi (the micro-market where BlueRidge 2 is located), vacancy rates dropped to 7%, from 11.5% last quarter, while rental values remained stable. CBRE expects rental values in Hinjewadi to increase slightly, over the coming quarters, due to limited supply of space in the micro-market.

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.