Mapletree Logistics Trust

Good evening. Thanks for joining Maple Tree Logistics Trust. Results presentation for the second quarter ended September 2022. Sorry for the slight delay. We had some technical glitches over here, but not to worry. Here we have the full team here to present the results. We'll start off with Charmaine. Okay, so Charmaine will begin the presentation on.

Hi, good evening everyone. Thanks for dialing in. I'll bring you through the key highlights for 2QFY2223. So for the quarter, gross revenue rose 11.4% year-on-year to $184 million. NPI grew 10.8% to $160 million. and DPU for the quarter is at 2.248 cents. That's 3.5% year-on-year increase from last year. Excluding effects on DPU, DPU growth would have been 5.7%. As at 30th September, MLT's portfolio occupancy stood at 96.4% with a whale of 3.3 years. Average rental reversion for leases renewed or replaced in 2Q is at 3.5%. We remain proactive with our capital management. Aggregate leverage stood at 37% as of 30 September. MLT's debt maturity profile remains well staggered, with a debt duration of 3.6 years. Approximately 82% of our debt has been hatched into fixed rates, and 72% of our income stream for the next 12 months has been hatched into Singapore dollars. During the quarter, we completed the acquisition of two parcels of industrial land in Subang Jaya. This is intended for potential amalgamation with MLT's existing assets, Subang 3 and 4, to develop the first mega-modern warehouse in Subang Jaya. We've also started decanting our 51 burnoids in preparation for AEI work by the end of the financial year. Moving on to details of the results, 2Q this year versus 2Q last year, gross revenue increased 11.4%, mainly due to higher revenue from existing properties and acquisitions completed last year and in 1Q this year. However, the revenue growth was moderated by FX losses. As currencies we have exposure to such as JPY and Korean Won continue to depreciate against the same dollars. Similarly, property expenses is higher by 15.7% due to the enlarged portfolio with 185 properties versus 163 properties last year, as well as higher provision for doubtful debts. Accordingly, NPI is higher by 10.8%. Borrowing cost is higher by 33.7%. This is mainly due to interest incurred on additional borrowings drawn to fund this year's and last year's acquisition as well as higher average interest with costs. After taking into account income support for the quarter of about $974,000, as well as hedging gains of about $1.9 million, as well as other adjustments, DPU for the quarter is at $2.248, 3.5% higher than the $2.173 last year. And excluding FX, DPU growth would have been 5.7%. Year-on-year first half this year versus first half last year, the trend and reasons behind the variances are largely similar to those of two year-on-year results. Gross revenue is higher by 13%, mainly due to higher revenue from existing properties as well as accretive acquisition. Although the revenue growth was moderated by FX losses, its currencies continue to depreciate against the same dollars. So similarly, property expenses is 20.1% higher due to the enlarged portfolio. as well as higher provision for doubtful debt and MPI higher by 12%. Borrowing costs also higher mainly due to interest incurred on additional borrowings drawn to fund last year's and this year's acquisitions as well as higher average interest costs. Income support for the period, the first half of the year is at $1.6 million, hedging gains of $3.4 million and after taking into consideration other adjustments, DPU for first half is at $4.516 4.2% higher than last year, excluding FX impact, DPU growth would have been 5.3%. Quarter on quarter, MLT's portfolio generated lower revenue in 2Q versus 1Q, mainly due to lower occupancy in certain properties in Singapore. As we convert some of these properties from SUA to MTDs, as well as lower occupancy in 51 Bernoy as we decant the property in preparation for AEI works. We also saw lower occupancy in China due to the uncertain economy as well as COVID lockdowns. Gross revenue is also lower due to the depreciation of JPY, Korean Won, Renminbi, and Aussie Dollars. So accordingly, MPI is 2% lower. Borrowing costs increased quarter on quarter due to incremental borrowings drawn to fund this quarter's acquisition. as well as higher average interest rates. DI is lower by 0.5% resulting in 2Q DPU being 0.9% lower than last quarter. MLT's balance sheet remains healthy. Total investment property stood at $12.9 billion versus 13 billion last quarter. This is 163 million lower, mainly due to net translation loss of about 192.3 million offset by acquisition of land parcels in Subang and Capex of 29 million. Total debt decreased by 96 million from 5 billion last quarter to 4.9 billion as of 30 September, mainly due to net translation loss on foreign currency denominated borrowings. NAV is slightly lower. $1.46 versus $1.47 last quarter. Due to the lower borrowings, our aggregate leverage ratio reduced to 37% versus 37.2% last quarter. Rated average annualized interest rate increased from 2.3% last quarter to 2.5%. Average debt duration, interest cover ratio, as well as adjusted interest cover ratio, all slightly lower than last quarter. Our debt maturity profile remains well staggered with an average debt duration of about 3.6 years. Debt due for refinancing for the rest of the year is at 7%, or about $362 million. With available committed credit facility of $923 million, this is sufficient to meet our refinancing need for the rest of the year. To mitigate the impact of interest rate risk and FX risk on MLC's DPU, we have hatched 82% of our total debt into fixed rate. Out of the 18% that remains unhatched, 6%, or about $290 million, is denominated in JPY, where we think JPY interest rates will remain stable. 8%, or about $414 million, is denominated in SING dollars. where we are keeping some of this unhatched to allow for paring down of loans with any divestment proceeds that will come in later. And the remaining 4% are denominated in the various currencies. For FX, about 72% of the estimated distributed income for the next 12 months has also been hatched either through currency forward contracts or derived in the same dollars. On this slide are the distribution details for 2Q. And James will bring us

to bring us through the portfolio details next. So in the 2Q area, 70% continue to be contributed by our developed markets or developed economies like Hong Kong and South Korea and Australia. Next, occupancy rates. We registered 96% 0.4% occupancy rate in 2Q, a slight drop of 0.4% against the first Q. Overall, it still remained stable and healthy. Low occupancy rates in Singapore, Japan, and China were down slightly. Singapore was down slightly because of MTD conversions in two of the properties. In Japan, we managed to backfill one of the balance availability space in the coming months. In China, it was due to In terms of lease expiries as a 2Q, we have 16.3% of lease expiries by annually expiring this year. And in terms of multi-tenanted buildings and single user assets, As of this quarter, we managed to bring it down to 25% of our annually being contributed from SUAs from 31% in the last quarter. In terms of the top 10 tenants that we have in our MLT portfolio, it now accounts for 22.7% of our total gross revenue. CWT, our number one customer, We have managed to sign direct leases with the end customers, so we have brought down the concentration from 6.3% to 4.4% of overall MLT's revenue. The other top 10 tenants continue to be rather stable in our portfolio. We have more than 800 tenants in our customer base in 2Q. and again three quarters of these tenants belong to the consumable and consumption based trade sectors. So this will continue to hold up and underpin our resident portfolio. Next in terms of investment update, we have just to recall in the last quarter we mentioned that we have acquired two adjacent sites next to our property in KL, Subang 1 and 2. So this 1.4 million square feet potential development project is meant to be completed in 2027 after we amalgamate these four sites by middle of next year to start the construction by second half of next year. So the estimated development cost is about $173 million. In Singapore, just to recap again, we have an ongoing redevelopment project in the west side of Singapore, 51.9 Road. The GFA will be increased by 2.3 times. We have started decanting the customers or tenants in this property. Demolition will start in December this year, and this development will be completed by 1Q2025. So I brought this populate at a snapshot. You can see that the will is now at 3.3, yes. Occupancy rate is 96.4%, that's a repeat, and properties by