Mapletree Logistics Trust

CIMB Research, April 22

MAPLETREE Logistics Trust (MLT) reported its FY2014 results, with revenue coming in at $80.1 million (+5.7 per cent y-o-y) and DPU at 1.87 cents (+7.8 per cent y-o-y).

The growth in revenue was dampened in part as a result of the weaker yen.

Excluding forex losses, gross revenue would have increased to $81.0 million (+6.9 per cent y-o-y) due to new attribution from the newly completed AEIs in Singapore and Japan, and contribution from the Box Centre in Korea that was acquired during the year (July 2013).

Lower borrowing costs and the partial distribution of the net gain from the divestment of 30 Woodlands Loop boosted its earnings, taking the total DPU to 1.89 cents (+9.2 per cent y-o-y).

Rental reversion in FY2013/2014 remained healthy at 17 per cent, mainly from Hong Kong and Singapore properties. Looking ahead, with positive rental reversion expected to moderate, together with only 18 per cent of net lettable area (NLA) (of which 14 per cent has been renewed ahead of expiry) to be renewed in FY2014/2015, we believe MLT will rely more on acquisition and redevelopment for growth.

In FY2014/2015, MLT is likely to benefit from the completed redevelopment project at Mapletree Benoi Logistics Hub (100 per cent pre-committed), and the recently announced $34.3 million acquisition in Iskandar.

With the current leverage ratio of 33.3 per cent, MLT continues to have the financial ability to capitalise on further inorganic opportunities.

Although it is well poised to grow in FY2014/2015, we believe that the positivity of MLT may be dampened by the continual weakness in the yen. We maintain our "hold" rating with a slightly higher DDM-based target price of S$1.13 as we wait for more impactful acquisitions and redevelopments.

HOLD