My Portfolio Review: Capitaland Mall Trust’s Earnings Report 4Q17

Okay, CapitaLand Mall Trust’s results announcement is already past (at 24 Jan 2018) but I feel that since I am writing about the last year last quarter results of the counters that I hold, I myself better make a complete write-up about them. I know it’s kind of late but I just go through them to take stock of the financial health of the securities that I own. So, let’s get started.

On 24 Jan 2018, CapitaLand Mall Trust (CMT) reported that its net property income (NPI) rose by about 3% in 4Q17 to about S$119 million when compared to 4Q16. Distributable income for 4Q17 was 0.8% more than 4Q16 (about S$103 million). Distribution per unit (DPU) in 4Q17 was 0.7% higher than last financial year 4Q16 (about 2.90 cents).

For the whole financial year 2017, distributable income was 0.4% more than the year 2016 (about S$396 million). DPU for 2017 is more  than that of 2016 by 0.3% (11.16 cents).

Gross revenue rose by 1.8% for CMT’s 4Q17 while NPI increased by 2.6% when compared to 4Q16.  The rise was mainly due to higher occupancy for Bugis Junction and The
Atrium@Orchard, somewhat mitigated by reduced gross revenue from Bedok Mall. This is the result of lower rental rates signed for new and renewed leases and lower occupancy.

For the whole financial year 2017, gross revenue was 1.1% lower compared to 2016. This is largely attributed to the temporary closure of Funan as it is closed for redevelopment since 1 July 2016. The lower occupancy and lower rental rates signed for new and renewed leases in Bedok Mall also contributed to the lower gross revenue in 2017. This was somewhat mitigated by higher rental rates signed from IMM building, JCube and Clarke Quay.

As at 31 December 2017, CMT’s average cost of debt and aggregate leverage were “3.2% and 34.2% respectively.”

For further reference, CMT’s press release for 4Q17 can be found here.

What I think of CMT’s results announcement  for 4Q17

Singapore’s first and largest retail Reit CMT has been resilient despite the “challenges facing the retail industry” according to Adj Professor Richard R. Magnus. Based on CMT’s closing price of S$2.020 per unit on 1 March 2018, the annualized distribution yield for 4Q 2017 was 5.74%. Although the gross revenue for 2017 was lower than 2016 due to the closure of Funan, I believe it would recover once the redevelopment works of Funan is done. The DPU of CMT would also rise as a result too. CMT’s average cost of debt and aggregate leverage is within reasonably low levels as well. I plan to use some of my funds to purchase more of CMT’s shares when the price hits a 52-week low. Right now, the price of CMT in the Singapore stock market is somewhat in between the 52-week high and low of S$2.17 and S$1.925. The Reit seems to be performing satisfactory in my opinion. Of course, don’t over-concentrate your funds in any one counter as you won’t know what will happen to them in the future. This counter is registering an unrealized  gain in my portfolio at this time of writing.

As always, do your homework and research before buying or selling any counters mentioned in this blog. All investments carry some form of risk and it’s best to consult a financial adviser if you are in doubt. I am not responsible for any financial loss as a result of the trading of this Reit or any other securities.

Have fun trading!



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