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Earnings Season - CMT and FCT Financial Results

Posted on the 30 October 2017 by Sgyounginvestment

Its earnings season again which means time for more dividends. I've owned Reits for a long time now where I can get stable and recurring income from these investments. Shopping mall Reits are attractive in Singapore and 2 of the most popular ones are Capitaland Mall Trust (CMT) and Frasers Centrepoint Trust (FCT).

CMT and FCT both reported their financial results just a few days ago and I must say shopping malls in Singapore are still quite resilient. The management of the malls is quite important as I personally saw a few malls become dead because of incompetent management. CMT and FCT are not the incompetent ones.

CMT financial results
For CMT, its 3Q financial results is nothing spectacular. DPU came in flat at only +0.3% year on year. The closure of Funan for redevelopment has affected its DPU as rental income decreased without Funan in its portfolio. Fo other malls, net property income remain largely unchanged.

Its NAV is currently at $1.95 and share price trading at $2.03. Its still a stable Reit to hold for the long term where I bought it back at $1.88-$1.90. I will still be holding this stock for its dividends. Dividend yield is about 5.5% base on current price.

FCT financial results
Frasers centrepoint trust is another resilient shopping mall reit which I have in my portfolio. It reported strong 4Q17 results where DPU rose 5.5% as compared to last FY quarter. Its portfolio occupancy rose to 92% from 89.4% and rental reversion was +8.3%. FCT has delivered 11 years of consecutive DPU growth. It is quite impressive to be so resilient and still has some steady growth.

For its portfolio, the higher income came mainly from the following:

Causeway Point
This is the shopping mall at Woodlands. There were renewed and new leases signed which contributed to a 2.5% increase in rental rate.

Northpoint City
The shopping mall at Yishun has been going through AEI works for quite some time now. The enhancements are progressively completed so there is higher occupancy and rent from the new tenants. There is also additional revenue from Yishun 10 retail podium which was acquired on 16 November 2016. This improved the revenue by 27.4% year on year

Changi City Point
The shopping mall right beside Expo MRT is doing well too. Higher rental rate from renewed and new leases signed, and improved occupancy contributed to an increase of 13.6% in revenue.

The only lagging mall in FCT portfolio is Bedok point which saw a drop of 26.4% in revenue. However, it is only 2.8% of all of FCT's NPI so it isn't much of a concern. The largest contributor comes from causeway point at 50.6% of FCT's NPI. Causeway point occupancy rate is still impressive at 99.5%. Northpoint city will be the next major contributor as AEI works are progressively completed. Occupancy rate stands at 81.6% currently so there is lots of room to continue growing.

FCT has provided me dividend income of about 6% p.a. Dividend yield is about 5.4% at current prices. It is trading at a price to book ratio of 1.08x which is slightly above its net asset value. I wouldn't consider accumulating more at this point but will continue to hold this for dividend income.

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