Thursday, January 19, 2012

SuntecReit: Excellent Q4 results

Suntec Q4 results were released today after market closed. I felt that the results were quite good for a couple of reasons

1) Higher distributable income and distribution per unit (dpu) from FY10 to FY11
The distributable income increased from 182.5 mil to 220.7 mil (+20.9%)
The distribution per unit increase from 9.859 to 9.932 (+0.7%). This is also higher than the original forecast of 8.699c. When we invest in REITs, we will want them to have increasing distributable income through more acquisitions and asset enhancements. SuntecREIT is planning for the latter currently.

2) Higher DPU compared to previous year same quarter
The next distribution for Suntec will be 2.479c
Ex date: 31 Jan
Payment date: 28 Feb

This is 7% higher than the DPU in 4Q 2010 (2.316c)

Other points to note:
Office Leases Expiring in FY 2012 Down to 10.1%
SuntecREIT forward renewed more than 233,000 sq ft of FY 2012 leases. This is an important move to ensure that high occupancy rate is maintained.

No major refinancing requirement till 2013
This will probably mean that we will not see another private placement or rights issue for SuntecREIT in FY2012

Debt to Asset Ratio Improved to 37.3% (as of 31 Dec 2011, it was 39.05%)
Lesser debt is always good. Isn't? =)

Other thoughts:
SuntecReit has been increasing for the past few days like many other SG stocks and reits. As the 4Q report is quite good, I would think that SuntecREIT will open in the green tomorrow. The next resistance we are looking at will be around 1.20

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