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Summary of Results
Consolidated Income Statement
Statement of Comprehensive Income
Consolidated Balance Sheet (Group)
Review of performance
3Q FY2019 vs 3Q FY18/19
Total property income for 3Q FY2019 increased by INR292 million (12%) to INR2.7 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 15% to S$51.5 million. The SGD depreciated by about 2% against the INR over the same period last year.
Total property expenses increased by 32% to INR768 million (S$14.9 million) mainly due to increase in operation and maintenance expenses across the properties.
Net property income for 3Q FY2019 increased by 6% to INR1.9 billion (S$36.6) million due to the above factors.
Trustee-manager's fees increased by INR33 million (19%) to INR210 million (S$4.1 million), which is in-line with higher net property income and portfolio value as of 31 December 2019.
Other operating expenses increased by INR20 million to INR45 million (S$0.9 million) mainly due to provision for Singapore GST during the quarter.
Finance costs increased by INR128 million (25%) to INR636 million (S$12.3 million) mainly due to an increase in borrowings pertaining to construction funding for Arshiya, AURUM IT SEZ, aVance 5 & 6, aVance A1 & A2 and BlueRidge 3.
Interest income increased by INR166 million (39%) or S$3.4 million (41%) 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 3Q FY2019 of INR16 million (S$0.3 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 3Q FY2019 of INR111 million (S$2.2 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 INR1.5 billion in 3Q FY2019, an increase of 10% as compared to INR1.4 billion in 3Q FY18/19. In SGD terms, ordinary profit before tax increased by 12% to S$29.3 million.
Income tax expenses increased by INR2.5 billion to INR3.1 billion (S$59.2 million) mainly due to deferred tax liabilities arising from the annual fair value revaluation of investment properties.
- Current income tax expenses of INR336 million (S$6.5 million).
- Trustee-manager fees of INR102 million (S$2.0 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 INR122 million (S$2.4 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 INR93 million (S$1.8 million) is deducted from income available for distribution.
Income available for distribution for 3Q FY2019 increased by 5% to INR1.3 billion, mainly due to increased net property income and and higher interest income from investments pertaining to construction funding for Arshiya, AURUM IT SEZ, aVance 5 & 6, aVance A1 & A2 and BlueRidge 3, which was partially offset by lower current tax expense in 3Q FY18/19, due to the tax benefit of INR170 million arising from the merger of VITP Private Limited and Flagship Developers Private Limited last year. In SGD terms, income available for distribution increased by 7% to S$25.4 million.
Income available for distribution per unit for 3Q FY2019 was INR1.22 or 2.36 S₵. DPU was INR1.09 or 2.12 S₵ after retaining 10% of income available for distribution, representing an increase of 2% over 3Q FY18/19 in INR terms and 4% in SGD terms.
3Q FY2019 vs 2Q FY2019
Total property expenses for 3Q FY2019 increased by 4% to INR2.7 billion (S$51.5 million) mainly due to positive rental reversions during the quarter.
Net property income for 3Q FY2019 increased by 41% to INR768 million (S$14.9 million) mainly due to higher operation and maintenance expenses across the properties.
As a result, net property income for 3Q FY2019 decreased by 6% in both INR and SGD terms to INR1.9 billion and S$36.6 million respectively.
Income available for distribution decreased by 4% in both INR and SGD terms to INR1.3 billion and S$25 million.
Income available for distribution per unit for 3Q FY2019 was INR1.22, or 2.36 S₵. DPU was INR1.09 or 2.12 S₵ after retaining 10% of income available for distribution, representing a drop of 7% over 2Q FY2019 in both INR terms and SGD terms.
Based on the market research report by CBRE South Asia Pvt Ltd (“CBRE”) for the quarter ended 31 December 2019, some of the key highlights (compared to quarter ended 30 September 2019) include:
- In Whitefield (the micro-market where ITPB is located), vacancy decreased to 9.7%, from 11.0% last quarter, while rental values increased slightly. CBRE expects rental values to increase over the next few quarters due to sustained demand.
- In Old Mahabalipuram Road (the micro-market where ITPC is located), vacancy increased to 5.8%, from 4.7% last quarter, while rental values remained stable over the same time period. CBRE expects rental values to grow in the coming quarters. In Grand Southern Trunk (the micro-market where CyberVale is located), vacancy decreased to 4.8%, from 6.1% last quarter, while rental values remained stable. CBRE expects rental values in Grand Southern Trunk to remain stable over the coming quarters.
- In IT Corridor I1 (the micro-market where The V, CyberPearl and aVance Hyderabad are located), vacancy decreased to 2.6%, from 4.0% last quarter, while rents remained stable over the same time period. With sustained demand for space, CBRE expects rental values in IT Corridor I to increase marginally in the coming quarters.
- In Hinjawadi (the micro-market where aVance Pune is located), vacancy decreased marginally to 6.3%, from 6.6% last quarter, while rental values increased. CBRE expects rental values in Hinjawadi to remain 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 differentiate its assets, while maintaining financial discipline, and seeking growth opportunities.
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