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Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

3Q FY18/19 vs 3Q FY17/18

Total property income for the quarter ended 31 December 2018 (“3Q FY18/19”) increased by ₹140 million (6%) to ₹2.4 billion. This was mainly due to income contribution of ₹288 million (S$5.5 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 ₹146 million (S$2.8 million) with the phasing out of the DPP in ITPB.

In SGD terms, total property income decreased by 3% to S$44.9 million. The SGD appreciated by about 10% against the INR over the same period last year.

Total property expenses for 3Q FY18/19 decreased by 12% to ₹582 million (S$11.1 million) mainly due to lower utilities expenses with the phasing out of the DPP in ITPB, partially offset by higher property management fees on the account of the new properties.

Net property income for 3Q FY18/19 increased by 14% to ₹1.8 billion due to the above factors. In SGD terms, net property income grew by 4% to S$33.9 million.

Trustee-manager's fees increased by ₹32 million (22%) to ₹176 million (S$3.4 million), in line with higher net property income and portfolio value as of 31 December 2018.

Finance costs increased by ₹115 million (29%) to ₹508 million (S$9.7 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 ₹371 million (S$7.0 million) mainly due to interest income pertaining to AURUM Debentures, aVance Debentures 1 and aVance Debentures 2.

Realised gain on derivative financial instruments for 3Q FY18/19 of ₹328 million (S$6.1 million) arose mainly from the refinancing of SGD-denominated loans that have been hedged into INR, offset by losses from the settlement of foreign exchange forward contracts entered into to hedge income repatriated from India to Singapore.

Realised exchange loss for 3Q FY18/19 of ₹458 million (S$8.5 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 ₹1.4 billion in 3Q FY18/19, an increase of 27% as compared to ₹1.1 billion in 3Q FY17/18. In SGD terms, ordinary profit before tax increased by 15% to S$26.1 million.

Unrealised exchange gain for 3Q FY18/19 of ₹777 million (S$14.8 million) relates mainly to the revaluation of SGD-denominated loans.

Income tax expenses increased by ₹215 million (S$3.5 million) mainly due to higher current income tax of ₹111 million from higher net property income and interest income; higher deferred tax liabilities of ₹284 million from newly acquired assets and merger of VITP Private Limited and Flagship Developers Private Limited (“VITP’s merger”); and partially offset by current tax benefit of ₹170 million arising from VITP’s merger.

Distribution adjustments:

  • Current income tax expenses of ₹246 million (S$4.6 million).
  • Trustee-manager fees to be paid in units of ₹86 million (S$1.6 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 of ₹94 million (S$1.7million) 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 ₹66 million (S$1.3 million) is deducted from income available for distribution.

Income available for distribution for 3Q FY18/19 increased by 53% to ₹1.2 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 SGD terms, income available for distribution increased by 39% to S$23.6 million.

Income available for distribution per unit for 3Q FY18/19 was ₹1.19 or 2.28 S₵. DPU was ₹1.07 or 2.05 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 36% over 3Q FY17/18 in INR terms and 25% in SGD terms.

 

YTD FY18/19 vs YTD FY17/18

Total property income for the 9 months ended 31 December 2018 (“YTD FY18/19”) increased by ₹423 million (7%) to ₹6.9 billion. This was mainly due to income contribution of ₹856 million (S$16.9 million) from:

  • incremental income from BlueRidge 2 which was leased out in phases;
  • incremental 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 ₹467 million (S$9.2 million) with the phasing out of the DPP in ITPB.

In SGD terms, total property income decreased by 3% to S$134.7 million. The SGD appreciated by about 9% against the INR over the same period last year.

Total property expenses for YTD FY18/19 decreased by 14% to ₹1.8 billion (S$34.3 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 on account of the new properties; and one-off provision for water supply and sanitary connection charges in ITPB.

Net property income for YTD FY18/19 grew by 16% to ₹5.2 billion. In SGD terms, net property income grew by 6% to S$100.4 million.

Trustee-manager’s fees increased by ₹97 million (23%) to ₹525 million (S$10.2 million), in line with higher net property income and portfolio value as of 31 December 2018.

Finance costs increased by ₹219 million (19%) to ₹1.4 billion (S$26.8 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 ₹869 million (S$16.7 million) mainly due to interest income pertaining to AURUM Debentures, aVance Debentures 1 and aVance Debentures 2.

Realised gain on derivative financial instruments for YTD FY18/19 of ₹436 million (S$8.3 million) arose mainly from the refinancing of SGD-denominated loans that have been hedged into INR.

Realised exchange loss for YTD FY1819 arose mainly from the refinancing of SGDdenominated loan facilities. Realised exchange gain or loss is recognised when SGDdenominated borrowings are settled.

Ordinary profit before tax increased by 28% to ₹3.8 billion. In SGD terms, ordinary profit before tax increased by 18% to S$74.0 million.

Distribution adjustments:

  • Current income tax expense of ₹914 million (S$17.8 million).
  • Trustee-manager fees to be paid in units of ₹256 million (S$5.0 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 of ₹401 million (S$7.6 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 ₹197 million (S$3.8 million) is deducted from income available for distribution.

Income available for distribution for YTD FY18/19 increased by 53% to ₹3.3 billion. In SGD terms, income available for distribution increased by 41% to S$64.9 million.

Income available for distribution per unit for YTD FY18/19 was ₹3.21 or 6.26 S₵. DPU was ₹2.89 or 5.63 S₵ after retaining 10% of income available for distribution. This amounts to an increase of 38% over YTD FY17/18 in INR terms and 27% in SGD terms.

3Q FY18/19 vs 2Q FY18/19

Total property income for 3Q FY18/19 remained stable at ₹2.4 billion (S$44.9 million).

Total property expenses for 3Q FY18/19 decreased by 6% to ₹582 million (S$11.1 million) mainly due to higher other property operating expenses in the last quarter resulting from one-off provision for water supply and sanitary connection charges in ITPB partially offset by a one-off gain from the scrap sale of the DPP.

As a result, net property income for 3Q FY18/19 increased by 5% to ₹1.8 billion. In SGD terms, net property income increased by 3% to S$33.9 million.

Income available for distribution for 3Q FY18/19 increased by 5% to ₹1.2 billion. In SGD terms, income available for distribution increased by 3% to S$23.6 million.

 

Commentary

Based on the market research report by CBRE South Asia Pvt Ltd (“CBRE”) for the quarter ended 31 December 2018, some of the key highlights (compared to quarter ended 30 September 2018) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy rates increased to 8.9%, from 6.4% last quarter, while rental values remained stable. Similarly, CBRE expects rental values to remain stable over the next few quarters due to sustained demand in line with supply.

Chennai

  • In Old Mahabalipuram Road (“OMR”, the micro-market where ITPC is located), vacancy rates decreased to 3.3%, from 3.7% last quarter, while rental values increased. This was due to significant leasing activity during the quarter. CBRE expects upward pressure on rental values 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 increased slightly on a q-o-q basis, despite a marginal increase in vacancy to 5.7%, from 5.6% 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 6.0%, from 7.0% 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.