Centurion - UOB Kay Hian 2024-03-06: Strong 2023 Results Across The Board With Bright Outlook Ahead

• Centurion reported strong 2023 results with higher occupancy rates and positive rental reversions across all its geographies and asset classes.
• Free cash flow generation remains strong, and with gearing at 0.38x and some capital recycling of its assets, Centurion has a decent war chest for its organic and inorganic ambitions. Stock liquidity remains an issue.
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Strong operational results boosted by one-off valuation gains.

• Centurion (SGX:OU8) reported a 114% y-o-y increase in PATMI to S$153m aided by a valuation gain of S$79m on its investment properties. However we note that even stripping this out, the company's operational results were strong with revenue rising by 15% y-o-y and core net profit (excluding one-off gains) up 20% y-o-y to S$84m.
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A more solid balance sheet heading into 2024.

• With S$78m in free cash flow generated in 2023, Centurion ended the year with a healthy S$75m in cash and net debt/equity of 38% vs 43% at end-22. The company has an average long-term debt maturity profile of six years.

Dividends normalising back to higher levels.

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Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-03-06 SGinvestors.io

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