SINGAPORE (Aug 5): The manager of First REIT has declared a DPU of 2.15 cents for 2Q19 ended June, unchanged from the same quarter last year.
Income distributable to unitholders came in at $17.1 million, up 1.2% from $16.9 million in 2Q18.
Rental and other income for the quarter inched up 0.2% to $29 million from $28.9 million a year ago.
Operating expenses for 2Q19 increased 52.2% to $647,000 compared to 2Q18 due largely to higher expenses incurred for Sarang Hospital and Indonesia properties.
Other expenses for 2Q19 slumped 82.1% to $0.2 million from $1.3 million in the preceding year due to lower unrealised exchange loss on USD loan.
Finance costs for the quarter decreased to $5 million from last year due to absence of a write-off of unamortised loan related costs due to refinancing of bank loans incurred last year.
Income tax expense also increased to $4.7 million compared to 2Q18 due largely to withholding taxes on higher dividend income received from foreign subsidiaries.
Consequently, net property income (NPI) dipped by 0.6% to $28.3 million, down from $28.5 million a year ago, due primarily to higher property expenses for South Korea and Indonesia properties.
As at end June, First REIT’s gearing remained stable at 34.5% with interest cover at 5.0 times.
“We do not expect any refinancing needs till 2021 as our low gearing will give us ample headroom to pursue yield-accretive acquisition opportunities to boost our portfolio,” says Victor Tan, Chief Executive Officer of First REIT.
Cash and cash equivalents stood at $28.8 million as at June 30.
Looking ahead, the manager says First REIT will continue to look for accretive acquisition opportunities from third parties or from the pipeline of healthcare assets from its sponsors.
In addition, the recent review by the Monetary Authority of Singapore (MAS) to further raise the leverage limit of 45% for S-REITs could further bolster growth opportunities if implemented.
Units in First REIT closed 3 cents higher at $1.08 on Monday.
