Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

1H FY2021 vs 1H FY2020

Total property income for 1H FY2021 increased by INR47 million (1%) to INR5.2 billion mainly due to income contribution of INR402 million from:

  • Endeavour building at ITPB, which was completed in November 2020; and
  • aVance 6 at aVance Hyderabad, which was acquired in March 2021;

but partially offset by lower occupancy and lower utilities income and carpark income because of the COVID-19 pandemic.

In SGD terms, total property income decreased by 4% to S$95.4 million. The SGD appreciated by about 5% against the INR over the same period last year.

Total property expenses decreased by 26% to INR1.0 billion (S$18.1 million) mainly due to lower operation and maintenance expenses, lower utilities expenses and reversal of expected credit loss in 1H FY2021 compared to allowance for expected credit loss in 1H FY2020.

Net property income for 1H FY2021 increased by 10% to INR4.3 billion (S$77.3 million) due to the above factors.

Trustee-manager's fees increased by INR38 million (9%) to INR453 million (S$8.2 million), which is in-line with higher net property income and portfolio value as of 30 June 2021.

Other operating expenses increased by INR42 million (38%) to INR152 million (S$2.8 million) mainly due to higher CSR expenses in 1H FY2021.

Finance costs increased by INR129 million (11%) to INR1.3 billion (S$24.1 million) mainly due to an increase in borrowing level.

Interest income increased by INR79 million (6%) to INR1.4 billion (S$26.3 million) mainly due to higher interest income from investments in Casa Grande, GardenCity, Arshiya Panvel, AURUM IT SEZ and BlueRidge 3, but partially offset by loss of interest income following the acquisition of aVance 6.

Realised gain on derivative financial instruments for 1H FY2021 of INR300 million (S$5.5 million) arose mainly from the settlement of SGD-denominated loans, but partially offset by loss from the settlement of foreign exchange forward contracts entered into hedge income repatriated from India to Singapore.

Realised exchange loss for 1H FY2021 of INR463 million (S$8.4 million) arose mainly from settlement of SGD-denominated loans. 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 INR3.6 billion in 1H FY2021, an increase of 4% as compared to INR3.5 billion in 1H FY2020. In SGD terms, ordinary profit before tax dropped by 1% to S$65.5 million.

Income tax expenses increased by INR 528 million (100%) to at INR1.1 billion (S$19.2 million) mainly due to higher deferred tax liabilities arising from acquisition of aVance 6 and lower current income tax resulting from reversal of dividend distribution tax (“DDT”) provision in 1H FY2020.

Distribution adjustments:

  • Current income tax expenses of INR789 million (S$14.3 million).
  • Trustee-manager fees of INR221 million (S$4.0 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 INR66 million (S$1.2 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.
  • Income due to non-controlling interests of INR163 million (S$3.0 million) is deducted from income available for distribution.

Income available for distribution for 1H FY2021 decreased by 5% to INR3.0 billion, mainly due to the reversal of DDT provision in 1H FY2020 and higher finance cost resulting from higher level of borrowing, but partially offset by higher NPI and higher interest income from additional investments in Casa Grande, GardenCity, Arshiya Panvel, AURUM IT SEZ and BlueRidge 3. In SGD terms, income available for distribution decreased by 9% to S$53.8 million.

Income available for distribution per unit for 1H FY2021 was INR2.57 or 4.67 S₵. DPU was INR2.31 or 4.20 S₵ after retaining 10% of income available for distribution, representing a decrease of 5% and 9% in INR terms and SGD terms respectively.

1H FY2021 vs 2H FY2020

 

Total property income or 1H FY2021 increased by 4% to INR5.2 billion (S$95.4 million) mainly due to the income from Endeavour building at ITPB which was completed in November 2020 and aVance 6 at aVance Hyderabad which was acquired in March 2021.

Total property expenses for 1H FY2021 decreased by 1% to INR1.0 billion (S$18.1 million) mainly due to lower operation and maintenance expenses during 1H FY2021.

As a result, net property income for 1H FY2021 increased by 5% at INR4.3 billion. In SGD terms, net property income increased by 4% to S$77.3 million.

Income available for distribution increased by 1% to INR3.0 billion, mainly due higher NPI and higher provision for Singapore GST in 2H FY2020, but partially offset by higher finance cost and lower current income tax resulting from reversal of DDT in 2H FY2020. In SGD terms, income available for distribution remained stable at S$53.8 million.

Income available for distribution per unit for 1H FY2021 was INR2.57, or 4.67 S₵. DPU remained stable at INR2.31 or 4.20 S₵ respectively, after retaining 10% of income available for distribution.

 

Commentary

India was hit by a second wave of COVID-19 in April 2021. States across India were locked down and subsequently reopened. To date, Bangalore, Chennai and Hyderabad have lifted their lockdown, while Pune is expected to follow suit by end July 2021. Daily cases of COVID-19 and mortality rates have declined. As such, tenants are expected to gradually ramp-up attendance in their offices in the coming months.

Based on the market research report by CBRE South Asia Pvt Ltd (“CBRE”) for the period ended 30 June 2021, some of the key highlights (compared to period ended 31 December 2020) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy increased to 16.3%, from 13.7% as of 31 December 2020, due to the addition of new supply and marginal space take-up. Rental values remained stable. CBRE expects rental values to decline slightly across SEZ and non-SEZ sectors.

Chennai

  • In Old Mahabalipuram Road (the micro-market where ITPC is located), vacancy increased to 15.8%, from 12.0% as of 31 December 2020, due to tenant exits and addition of new supply. Non-SEZ rental values declined slightly, while SEZ rental values remained stable. CBRE expects rental values to decline further for both SEZ and non-SEZ space.
  • In Grand Southern Trunk (the micro-market where CyberVale is located), vacancy increased to 19.4%, from 6.5% as of 31 December 2020, due to the addition of large supply from the completion of Gateway IT Park Block A4, which was met with muted leasing demand. Rental values remained broadly stable over the near term, though CBRE expectes rental values to decline slightly in the upcoming months due to the higher vacancy level.

Hyderabad

  • In IT Corridor I1 (the micro-market where ITPH, CyberPearl and aVance Hyderabad are located), vacancy increased to 7.6%, from 5.1% as of 31 December 2020, due to release of secondary space and lower space absorption. Rental values remained stable over the same period. CBRE expects rental values in IT Corridor I to remain stable in the coming quarters.

Pune

  • In Hinjawadi (the micro-market where aVance Pune is located), vacancy increased to 17.7%, from 13.8% as of 31 December 2020. Rental values 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.