fy 2011 financial resultsfirstreit.listedcompany.com/newsroom/20120126_180547_aw9...2012/01/26 ·...
TRANSCRIPT
26 January 2012
FY 2011 Financial Results
Disclaimer
This presentation has been prepared by Bowsprit Capital Corporation Limited, in its capacity as the manager of First RealEstate Investment Trust (“First REIT” and as manager of First REIT, the “Manager”).
The value of units in First REIT (“Units”) and the income from them may fall as well as rise. Units are not obligations of,deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks,including the possible loss of the principal amount invested.
This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties based onthe Manager’s current view of future events. Actual future performance, outcomes and results may differ materiallyfrom those expressed in forward-looking statements as a result of risks, uncertainties and assumptions – representativeexamples include, without limitation, general economic and industry conditions, interest rate trends, cost of capital,capital availability, shifts in expected levels of property rental income, change in operating expenses, property expensesand government and public policy changes and continued availability of financing in the amounts and the termsnecessary to support future business.
The past performance of First REIT is not necessarily indicative of the future performance of First REIT.
1 Financial highlights
2 DPU & price comparison
3 Capital management
4 In review
5 Portfolio highlights
6 Prospects
3
2011 financial highlights
Gross revenue increase mainly due to contributions from 3 new property acquisitions in Indonesia (December 2010) and Korea (August 2011)
o Mochtar Riady Comprehensive Cancer Centre o Siloam Hospitals Lippo Cikarango Sarang Hospital
Net asset value per unit stands at 80.50¢ as at 31 December 2011
+ 82.0%: S$13.9 m + 82.2%: S$13.8 m + 122.9%: S$12.1 m
4
4Q
Gross revenue Net property income Distributable income
+ 78.4%: S$54.0 m + 78.9%: S$53.4 m + 105.8%: S$43.9 m FY
Financial overview
S$’000 4Q 2011
4Q 2010
Change FY2011
FY2010
Change
Gross Revenue 13,925 7,649 + 82.0% 54,006 30,274 + 78.4%
Net Property Income 13,773 7,559 + 82.2% 53,436 29,875 + 78.9%
Distributable Amount 12,1151 5,434 + 122.9% 43,9341 21,346 + 105.8%
Distribution Per Unit (cts)• For the period• Adjusted
1.931
1.931
0.870.87
+ 121.8%+ 121.8%
7.011
7.011
6.633.423
NC2
+ 105.0%
Annualised Distribution Per Unit (cts) 7.011 6.634 NC2 7.011 6.634 NC2
NC = Not comparable1) This includes distribution coming out of a portion of the total gains on divestment of the Adam Road property of about S$8.7 million. The
balance of the gain will be distributed to unitholders at the discretion of the Manager of First REIT in future periods.2) YTD 31 December 2011 vs YTD 31 December 2010 are not comparable due to the effect of the rights issue and acquisitions made in
December 2010. (see also footnote 3)3) Restated to take into account the effect of the rights issue in December 2010.4) Actual paid for FY 2010 and the distribution for 4Q 2010 was based on enlarged units base as a result of rights issue in December 2010.
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Quarterly performance
Steady rental structure
Yearly rental increment for Indonesia properties; base (2x percentage increase of Singapore CPI, capped at 2%) plus variable components (function of turnover growth). Singapore and South Korea properties comprise fixed base rental and annual increment of 2.0%.
Long term leases
Rental from Indonesia and Singapore properties denominated in Singapore dollars, and rental from South Korea property denominated in US dollars.
Net Property IncomeGross Revenue
6
54,006
30,274
53,436
29,875
S$’000
Rental income: breakdown by geography
Higher revenue to be generated from Indonesia
Enjoyed variable rental growth component of 1.25% of total gross revenue of the four existing Indonesian assets in FY 2011, in addition to the annual escalation based on 2 times Singapore CPI (capped at 2%); acquisition of MRCCC and SHLC properties to further boost revenue in FY 2011
Added dimension from new geographical region
Sarang Hospital enjoys high occupancy rate; known for its rehabilitative treatment and nursing healthcare services
S$’000
7
1Q 12,444 736 -
2Q 12,468 755 -
3Q 12,606 768 304
4Q 12,655 769 501
1Q 6,729 722
2Q 6,803 740
3Q 6,878 753
4Q 6,895 754
90.2%
9.8%
92.9%
5.6% 1.5%
1 Financial highlights
2 DPU & price comparison
3 Capital management
4 In review
5 Portfolio highlights
6 Prospects
1.96¢
Excluding Rights Issue units
*Actual DPU for 4Q 2010
9
Quarterly DPU breakdown
Consistent DPU
2009 2010 2011
DPU for 3Q 2011 and 4Q 2011 includes distribution coming out of a portion of the total gains on divestment of the Adam Road property which was divested in 1Q 2011
Actual paid for FY 2010 and the distribution per unit in 4Q 2010 was based on the enlarged unit base as a result of the rights issue in December 2010
The distribution for 4Q 2011 includes distribution coming out of a portion of the total gains on divestment of the Adam Road property in 1Q 2011, which is estimated to be around S$8.7 million
The balance of the gain will be distributed to unitholders at the discretion of the Manager of First REIT in the coming quarters
1 Oct 2011 – 31 Dec 2011
Distribution details
Distribution Per Unit 1.93¢
- Taxable 0.08¢
- Tax-Exempt 1.19¢
- Capital 0.32¢
- Other gain 0.34¢
Book Closure Date 3 February 2012
Distribution Payment Date 29 February 2012
First REIT has maintained a payout policy of 100% of distributable income since listing in Dec 2006
10
The ex-dividend date will be on 1 February 2012
As at 25 Jan 2012
Since listing in December 2006
Adjusted for Rights Units
11
First REIT share performance
FTSE ST Real Estate Investment Trusts Index
STI Index
First REIT
First REIT vs STI Index vs FTSE ST REIT Index
12
As at 25 Jan 2012
1 Financial highlights
2 DPU & price comparison
3 Capital management
4 In review
5 Portfolio highlights
6 Prospects
Assets
Liabilities
S$’000As at 31 Dec 2011 As at 31 Dec 2010
(Restated)
Non-current 618,453 612,800
Current 42,163 41,771
Total 660,616 654,571
Non-current 79,586 87,426
Current 75,731 81,273
Total 155,317 168,699
Unitholders’ Funds 505,299 485,872
NAV/unit 80.50¢ 78.08¢
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Healthy balance sheet
Investment properties increased from S$612.8 million to S$618.0 million due to increase in fair value of investment properties, the acquisition of Sarang Hospital and the divestment of the Adam Road property
Unitholders’ funds increased due to the increase in the fair value of investment properties as a result of the annual valuation dated 28 December 2011
As at 31 Dec 2011 As at 31 Dec 2010
Total Debt* S$98.7 million S$57.7 million
Interest Cover 12.3 times 11.6 times
Debt-to-Property 16.0% 9.4%
* before transaction costs
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Borrowings are secured by property assets (except Sarang Hospital)
Low gearing
Total Debt increased due to the drawdown of the OCBC Term Loan facilities to part finance the acquisition of MRCCC and the acquisition of Sarang Hospital. The amount was partly offset by the repayment from the net sale proceeds from the divestment of the Adam Road property
Even after the drawdown of the loan, First REIT’s gearing is still much lower than the regulatory limit of 35%
1 Financial highlights
2 DPU & price comparison
3 Capital management
4 In review
5 Portfolio highlights
6 Prospects
Completion of acquisition in South Korea
South Korea’s Sarang Hospital: completed in August 2011
Purchase price : US$13.0 million
Land tenure : Freehold
Land area : 2,142 sqm
Gross Floor Area : 4,982 sqm
Lease terms : 10 years with option to renew for 10 years from date of completion
Rental Escalation : 2.0 %
The largest rehabilitation treatment and nursing services facility in Yeosu City – host of the 2012 World Expo
17
Extension detailsA 5-storey building to, and adjoining, the existing building
Purpose Nursing home
Floor area Approximately 994 sqm
Estimated cost S$5.0 million
Expected completion 2H 2012
18
In line with our investment strategy to improve the returns and optimise the plot ratio of existing properties in the REIT’s portfolio, we are developing an extension to the Lentor Residence
Details of extension
Asset enhancements at Lentor Residence
1 Financial highlights
2 DPU & price comparison
3 Capital management
4 In review
5 Portfolio highlights
6 Prospects
First REIT now has ten properties across Indonesia, Singapore and South Korea
3 nursing homes with 672 beds 10-year leases with option to renew for 10 years Nearest date of renewal: Apr 2017
Enlarged portfolio
20
Indonesia
5 hospital properties with 775 beds 1 hotel and country club with 197 saleable rooms 15-year leases with option to renew for 15 years Nearest date of renewal: Dec 2021
Singapore
South Korea
1 hospital with 217 beds 10-year lease with option to renew for 10 years Nearest date of renewal: Aug 2021
Portfolio breakdown
Valuation since IPO (S$m)
Property 2006 2007 2008 2009 2010 *2011 % (2011)
Indonesia
Siloam Hospitals Lippo Village 132.5 139.0 138.5 146.8 147.3 153.8 24.9%
Siloam Hospitals Kebon Jeruk 71.2 75.1 74.1 81.2 82.0 85.9 13.9%
Siloam Hospitals Surabaya 23.6 25.8 26.2 27.4 29.7 30.9 5.0%
Imperial Aryaduta Hotel & Country Club 29.8 31.8 32.2 30.9 34.1 35.5 5.7%
Mochtar Riady Comprehensive Cancer Centre - - - - 216.0 217.5 35.2%
Siloam Hospitals Lippo Cikarang - - - - 41.3 41.3 6.7%
Subtotal 257.1 271.7 271.0 286.3 550.4 564.9 91.4%
Singapore
Pacific Healthcare Nursing Home @ Bukit Merah - 12.0 12.0 11.4 11.1 11.0 1.8%
Pacific Healthcare Nursing Home II @ Bukit Panjang - 11.4 11.4 11.1 11.0 11.0 1.8%
The Lentor Residence - 13.0 13.0 12.5 12.1 14.0 2.2%
Adam Road property1 - 17.5 17.5 19.6 28.2 - -
Subtotal - 53.9 53.9 54.6 62.4 36.0 5.8%
South Korea
Sarang Hospital2 - - - - - 17.1 2.8%
Grand Total 257.1 325.6 324.9 340.9 612.8 618.0 100%
* As at 28 December 20111 The Adam Road property was divested on 25 March 20112 Based on the valuation of US$13.2 million and exchange rate of US$1 = S$0.77
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22
Indonesia
Mochtar Riady Comprehensive Cancer Centre
Siloam Hospitals Lippo Cikarang
Siloam Hospitals Lippo Village
Siloam HospitalsKebon Jeruk
Siloam HospitalsSurabaya
Imperial AryadutaHotel & Country
Club
Type Hospital Hospital Hospital Hospital HospitalHotel & Country
Club
Land Area 4,145 sqm 9,900 sqm 17,442 sqm 11,420 sqm 6,862 sqm 54,410 sqm
Gross Floor Area 37,933 sqm 11,125 sqm 27,284 sqm 18,316 sqm 9,227 sqm 17,427 sqm
Purchase Price S$170.5 million S$35.0 million S$94.3 million S$50.6 million S$16.8 million S$21.2 million
Appraised Value1 S$217.5 million S$41.3 million S$153.8 million S$85.9 million S$30.9 million S$35.5 million
Annual Rental S$18,739,000 S$3,778,000 S$13,388,000 S$7,587,000 S$3,001,000 S$3,680,000
No. of Beds / Saleable rooms
165 112 160 178 160 197
No. of Staff
32 full time & part time doctors and
54 nurses & medical staff
75 full time & part time doctors, 115
nurses and medical staff
211 full time & part time doctors and
397 nurses & medical staff
211 full time & part time doctors and
328 nurses & medical staff
257 full time & part time doctors and
249 nurses & medical staff
--
Year of Building Completion
2010 2002 1995 1991 1977 1994
Centre of Excellence
Oncology Digestive Unit
Urology, Internal Medicine, Trauma
Neuro-science centre, Heart
centre
Urology centre, Orthopaedics
Fertility centre, Stroke centre --
Lease Terms
15 years with option to renewfor 15 years wef
30 Dec 2010
15 years with option to renew for
15 years wef 31 Dec 2010
15 years with option to renew for
15 years wef 11 Dec 2006
15 years with option to renew for
15 years wef11 Dec 2006
15 years with option to renew for
15 years wef 11 Dec 2006
15 years with option to renew for
15 years wef11 Dec 2006
1: MRCCC was appraised by KJPP Rengganis, Hamid & Rekan in strategic alliance with CB Richard Ellis (Pte) Ltd as at 28 December 2011. The other five Indonesian properties were each appraised by KJPP Willson & Rekan in association with Knight Frank as at 28 December 2011.
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Singapore
Pacific Healthcare Nursing Home @ Bukit Merah
Pacific Healthcare Nursing Home II @ Bukit Panjang
The Lentor Residence
Type Nursing Home Nursing Home Nursing Home
Land Area 1,984 sqm 2,000 sqm 2,486 sqm
Gross Floor Area (“GFA”)
3,593 sqm 3,563 sqm 2,983 sqm
Purchase Price S$11.8 million S$11.5 million S$12.8 million
Appraised Value1 S$11.0 million S$11.0 million S$14.0 million
Annual Rental S$991,000 S$966,000 S$1,071,000
No. of Beds / Saleable rooms
259 265 148
Year of Building Completion
2004 2006 1999
Title30 years leasehold from
22 Apr 200230 years leasehold from
14 May 200399 years leasehold from
20 Aug 1938
Lease Terms10 years with option to renew for 10 years wef
11 Apr 2007
10 years with option to renew for 10 years wef
11 Apr 2007
10 years with option to renew for 10 years wef
8 Jun 2007
1: Appraised by Colliers International Consultancy & Valuation (Singapore) Pte Ltd as at 28 December 2011.
Sarang HospitalYeosu City
Type Hospital
Land Area 2,142 sqm
Gross Floor Area (“GFA”)
4,982 sqm
Purchase Price US$13.0 million
Appraised Value1 US$13.2 million
Annual Rental US$637,000
No. of Beds / Saleable rooms
217
Year of Building Completion
2010
Title Freehold
Lease Terms 10 years with option to renew for 10 years wef 5 Aug 2011
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South Korea
1: Appraised by Cushman & Wakefield (Korea) Ltd as at 28 December 2011.
1 Financial highlights
2 DPU & price comparison
3 Capital management
4 In review
5 Portfolio highlights
6 Prospects
Dominates Indonesia’s Retail Malls and Hospitals
Currently has 7 hospitals with 1,227 beds under the Siloam Hospitals network
Nationally and internationally accredited
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Lippo Karawaci – the largest listed property company in Indonesia
LK’s growth plans: 25 hospitals in 5 years
East Kalimantan• June 2011• 104 beds
• 24 outpatient suites• 3 operating theatres
Siloam HospitalsBalikpapan
Siloam HospitalsJambi
Siloam HospitalsMakassar
East Sumatra• February 2011
• 59 beds• 40 outpatient suites • 3 operating theatres
South Sulawesi• 4Q 2011• 200 beds
LK’s 3 new hospitals
Strong sponsor pipeline in Indonesia
Intends to quadruple Siloam hospital division to 25 hospitals in five years
Transformational hospital group scale-up to USD3.5 billion in 5 years
First REIT has a Right of First Refusal to acquirenew healthcare properties from Lippo Karawaci,and has sufficient headroom for futureacquisitions and funding if the need arises
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Singapore: Nursing Home Development Programme
Possible acquisitions in other markets
Will continue to hunt for quality and yield-accretive healthcare-related assets in Asia
Target to raise asset base to S$1 billion in the next two to three years
Singapore & other markets
2011: A slew of governmental measures aimed at making healthcare more affordable to Singaporeans; more subsidies to cover social care for the elderly and health screening for the elderly
December 2010: The Singapore government launched the S$120 million “Nursing Home Development Programme” to boost healthcare in the home, nursing homes and community hospitals
6 new and upgraded nursing homes are expected to be completed over the next 3 years
Demand for such facilities and the number of nursing home beds in Singapore are projected to increase from 9,300 to 14,000 by 2020
Thank You
Q&As