Mapletree Logistics Trust

Hi, good morning. Welcome. Just before I start, Sharifa, I'd like to test, are you able to hear me well? I can hear you. Okay, good. Hi, good morning. Welcome to our results briefing for the second quarter and first half of FY23-24. So the full management team is here with us, Kiat, Charmaine, and James. So now, Charmaine will kick off the presentation.

Hi, morning, everyone. Okay, I'll bring you through the key highlights of the quarter first. So in 2Q this year, we completed the divestment of four assets, two in Malaysia, one in Singapore, and one in Japan. The net proceeds that we received were used to power downloads. So this brings our total number of properties from 193 at the beginning of the quarter to 189 at the end of the quarter itself. 2Q financial performance remains stable. Gross revenue is higher by 1.5% year-on-year. MPI is higher by 1.2%, and DPU, we're declaring 2.268 cents, which is 0.9% higher than 2Q last year. Our diversified portfolio continues to be resilient. Portfolio occupancy remains stable, 96.9%. Average rental reversion is a positive 0.2% on a portfolio basis, excluding China. We are looking at 9.1% higher year-on-year. Whale is stable at 3 years. With the repayment of loans with divestment proceeds, our aggregate leverage as of 30th September stands at 38.9%. About 83% of our total debt has been hedged into fixed rate with a debt maturity of 3.8 years, and about 80% of our income has been hedged for the next 12 months. Moving on to details of the 2Q results, So gross revenue is 1.5% higher, while MPI is higher by 1.2%. This is mainly due to higher contribution from our same-store portfolio, as well as acquisitions completed in one queue. This is partly offsetted by lower contribution from our China assets, as well as a loss on revenue for assets that we have taken off for AEI as well as upgrading purposes. FX impact at the top-line level, is a negative $8.4 million ABEX loss. After taking into account hedging gains of about $4 million, we are looking at an overall ABEX impact of $4 million. Borrowing costs increase of 10.2%. About two-thirds of this is due to interest costs incurred on additional borrowings to fund our acquisitions and 1Qs. as well as higher, and the remaining one-third is due to higher interest rates on existing units. Investment gains for the quarter, $8.8 million. Including this investment gain, we're looking at DPU of 2.268 cents, 10.9% higher than last year. Two-year basis, gross revenue is lower by 0.7%, and MPI lower by 1%. This is mainly due to the loss of revenue from divested assets, as well as an FX loss of about $18 million. The lower gross revenue on a same-store basis is offsetted by contributions from acquisitions made in 1Q. Hedging gains for the period, about $8 million, so net net we're looking at FX impact of $8 million. After taking into account divestment gains, we are looking at a DPU of 4.59 cents versus 4.516 cents last year on a one-half basis. Quarter on quarter, gross revenue is 2.5% higher and 2.4% higher as compared to 1Q. On an FX level, I mean, in terms of FX, we're looking at minimal impact between the two quarters. CPU is marginally lower as compared to 2.271 cents last quarter. Our balance sheet. Moving on to slide nine. Investment properties as well as total assets lower by about $200 million mainly due to divestments of about $100 million as well as translation loss on our investment properties of about $100 million. Total debt is also lower from $5.6 billion to $5.4 billion mainly due to the repayment of debt with our divestment proceeds. Accordingly, gearing ratio decreased from 39.5% to 38.9%. As for interest rate, we are able to hold it stable at 2.5% versus last quarter. And that duration interest cover as well as adjusted interest cover ratios, this remains stable as compared to last quarter. Moving on to the next slide. Our debt maturity profile remains well staggered. With about $1 billion of available committed credit facilities on hand, this is more than sufficient to meet our refinancing needs for the remaining half of this year as well as next year. In terms of our interest rate and forex hedging, about 83% of our total debt has been hedged into fixed rates. With every 25 basis point increase in base rate, we're looking at an impact of 0.01 cents to DPU per quarter. As for FX, we have hedged about 80% of our DI for the next 12 months into SING dollars. James will bring us through the portfolio update.

In terms of assets under management in second quarter, The developed markets, you see, it's still contributing a fairly high 73% to our overall portfolio. These developed markets are giving us a lot of stability and resilience to our portfolio. Next slide. Overall, in terms of the operational environment in 2Q, we still registered a fairly high occupancy rate of 96.9%. Most of the markets still remain as close to 100% occupancy. However, we continue to be dragged down by China's lower occupancy as compared to 1Q. So China came in at 93% compared to 93.4% earlier on. And this is mainly due to the weaker occupancies in the tier 2 cities where we are experiencing excess supply coming in from north, west, and central China. So overall, the operational situation in China itself, we expect to recover hopefully in four quarters around there, or earlier if the government has to stimulate the economy with a booster. So in terms of rental reversions, we are registering high rental reversions in markets like Singapore, Korea, and Hong Kong. and in China itself, the rental reversion still remains fairly weak. In fact, China's reversion was minus 8.6% in 2Q as compared to flat reversion in 1Q. So without China's rental reversion, just to share a bit more, the rent reversion for MLT will come in at positive 9.1% for 2Q. This shows the lease expiry profile for our leases in the next few years. So next year we have a fairly high lease expiry coming up due to the shorter leases coming in from renewals from China. But we're trying to do the early renewals and extensions of these leases for the rest of this year so that we can move and lower this real expiry for next year. So from quarter to quarter you should see this real expiry power in FY24 coming down. The top 10 tenants accounts for about 22% of our total gross revenue and most of them are across these consumption sectors and e-commerce sectors. So we have customers coming from Woolworths and Coles in Australia. CWT continues to be the number one customer, but in terms of their contribution has been pat down in too few. Our diversified trade sectors contributes about 900 over customers that we have and 75% of them are serving the consumer related sectors. So that gives us stability on the domestic consumption demand that we are targeting in our portfolio.