SINGAPORE (May 25): The trustee-manager of RHT Health Trust has declared a 4Q18 distribution per unit (DPU) of 1.06 cents, down 5.4% from its quarterly DPU of 1.12 cents a year ago due to higher borrowings and expenses.
The latest set of 4Q results brings the trust’s DPU for FY18 to 4.51 cents, representing an 8.7% decline from its FY17 DPU of 4.94 cents.
Total revenue for 4Q18 grew 2.5% to $23.1 million from $22.6 million a year ago due to an increased base fee as well as higher interest charges payable by Fortis Healthcare for its service fee interest charges over the period under review.
These were offset in part by lower variable fees due to lower occupancy levels from Fortis at its clinical establishments.
In line with the higher revenue, net service fee and hospital income in INR terms grew 4.7% to $13.7 million from $13 million a year ago.
Total distributable income for the quarter fell by 4.5% to $8.6 million compared to $9 million in 4Q17.
This was attributed to higher borrowings as well as an increase in interest rates, which led to higher interest expenses. Higher trust-related expenses were also incurred due to refinancing activities as well as a consent solicitation exercise conducted over the latest quarter.
As at end-March, the trust’s gearing was at 25.4%.
In its outlook, the trustee-manager notes that various new measures rolled out by the Indian government may have an effect on the margins of healthcare operators involved, resulting in a more challenging operating environment.
This could also result in higher standards among healthcare operators in India, which may in turn provide opportunities for healthcare operators to gain advantage of their competitors, it adds.
RHT Health Trust’s trustee-manager previously declared and paid out 1.22 cents on 1 Mar, and a further 1.14 cents for 2Q18, which will be paid on 14 June this year.
This will bring the total amount paid out to 2.3 cents out of the 4.51 cents due.
Highlighting delays in payment of service fees due from Fortis Healthcare, which offered to buy out the trust’s entire portfolio of assets in Nov 2017, RHT Health Trust’s trustee-manager says it will consider the remaining distributable amount for FY18 when payments from Fortis are stabilised to result in more certain cashflow from RHT.
See: RHT Health Trust declares 2Q DPU of 1.14 cents; gets offer from Fortis to acquire entire portfolio
It however reminds unitholders that the remaining amount to be paid will fluctuate, depending on how the INR fares against the SGD at the time of its payment.
“While we have been closely following up with Fortis on making the payments to RHT current, we have also been working on the proposed disposal of the portfolio of assets of RHT to Fortis,” says Gurpeet Dhillon, CEO of the trustee-manager.
“We see the Proposed Disposal as being important and beneficial to RHT’s unitholders, in enabling them to realise their investment in RHT at an attractive rate. We note that Fortis has obtained their shareholders’ approval for the acquisition of the portfolio of asset of RHT on the 5 May 2018, and we hope to be able to put the Proposed Disposal for our Unitholders’ votes shortly,” he adds.
Units in RHT Health Trust closed 0.6% lower at 78 cents on Thursday.
