Mapletree Logistics Trust - Well Positioned For An Economic Slowdown

Mapletree Logistics Trust - DBS Research 2023-05-02: Well Positioned For An Economic Slowdown

SGinvestors.io

Published: 2023-05-20 03:03 PM

Mapletree Logistics Trust (SGX:M44U)

Mapletree Logistics Trust (SGX:M44U)'s 4Q23 (Jan to Mar 2023) revenues and net property income (NPI) came in at S$178.9m (-2.2% y-o-y, flat q-o-q) and S$154.3m (-4.7% y-o-y, -1.8% q-o-q). The weaker performance y-o-y was due mainly due to currency impact with the RMB, JPY, KRW and AUD weakening against the S$.
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Overall, Mapletree Logistics Trust's FY23 DPU came in at 9.02 cents, slightly ahead of our estimates.
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Mapletree Logistics Trust's portfolio valuation was raised by S$224.2m with a noticeable general compression in cap rates across the portfolio except for Australia (+ ~30 basis points) and South Korea (+ ~25 basis points). This was offset by close to S$757.9m in currency translation impact to reflect the weaker CNY, JPY, KRW and AUD against the S$.
Gearing was steady at 36.8% as at end of the quarter but is projected to head towards 40% post recent acquisitions in Japan, Korea and Australia. That said, the manager has put in place a divestment plan of up to S$400m; we estimate that every S$200m of divestments will bring gearing down by 1% ppt.
Average interest cost increased by 10 basis points q-o-q to 2.7% (vs 2.6% in Dec’23) due to the floating portion of its loans, and was higher by close to 0.5% since a year ago. Interest coverage ratio remains steady at 3.5x.
Mapletree Logistics Trust has hedged close to ~84% of its total debt at fixed rates which partially shields the REIT from rising interest costs, and ~77% of its income stream for the next 12 months has also been hedged into S$.