Over the past week, many companies reported their quarterly results. I would briefly share my thoughts on their results. In this post, I will cover the following counters:
- Frasers Centrepoint Trust
- Mapletree Logistics Trust
- Mapletree Industrial Trust
- Mapletree Pan Asia Commercial Trust
Given the current headwind, I have muted expectation and I would say that I am satisfied with what is reported. I have my eyes on possible outcomes two to three years down the road and I currently still believe that the above companies will continue do well after the current crisis.
The Reits are facing pressure from the increase in cost of debt and operating expenses. While all the above three saw increase in revenue and net property income, DPU has dropped for all if we exclude various measures such as releasing retained earning etc. Given that the occupancy stays resilient for the moment and rate hike is likely to slow going forward, the impact should be bearable for the coming year. Hopefully, the managers can also find some ways to mitigate the increase in cost in the next few quarters.
Mapletree Pan Asia Commercial Trust also reported its first results after acquiring Mapletree North Asia Commercial Trust. DPU is up 12.5% but falls short of its pro forma numbers. It is facing the same pressure from increase cost in both borrowing and operation as the other Reits. I did not favour the acquisition but it no longer matters now. As it is changing to quarterly distribution again, I am going to monitor how things will turn out in the next few quarters before deciding what to do with my current holding which takes up 4.8% of my portfolio.
As expected, iFAST continues to struggle this quarter. Without impairment, it reported a $2 million net profit for this quarter. The key reason behind the number is a flat revenue and increase in operating cost. This should continue for the next few quarters until the contribution of eMPF project comes end next year. Management has chose to maintain its dividend which is a consolation for the current quarter.
Micro-Mechanics reported a slightly lower revenue but its net profit dropped by 23%. The large drop in net profit can be attributed to the increase in cost sale. Demand remains healthy from ASEAN and US but there is a large drop in China’s market. The group attributed that to inflated demand for last year’s Q1.
Given the capacity utilisation stays pretty steady, I am expecting similar trend going forward and the group should report lower earning for this financial year. Having said that I am still hopeful that dividend will be maintained as both their cash flow and balance sheet remain strong.