SATS; Sabana Industrial REIT; Mapletree Logistics Trust; Mapletree North Asia Commercial Trust

Earnings season is upon us again, with many companies reporting their performance in the first half of 2022. This is an important announcement period as it gives us insight into how many Singaporean companies are making to what has happened so far. in 2022 – high inflation, the war in Ukraine, the reopening of Singapore.

For the week of July 18, more companies announced their financial results. In this week’s edition of 4 Stocks This Week, we explore four Singapore-listed entities that have revealed their earnings to the public, and what we can learn about them.

Read also : 4 Straits Times Index (STI) shares in which Temasek invests: DBS; Singtel; AIS; S&T Engineering

SATS Ltd (SGX: S58)

SATS (SGX: S58) is a provider of food solutions and gateway service solutions primarily to the aviation industry.

The Food Solutions segment offers in-flight catering, corporate catering, etc. Meanwhile, the Gateway Services Division offers ground handling and cargo services, passenger and security services, and baggage handling services, among others. SATS is a dominant player at Singapore’s Changi Airport.

Currently, SATS is present in more than 60 locations in 14 countries in Asia-Pacific, the Middle East and the United Kingdom.

SATS saw its overall business improve for its first quarter ended June 30, 2022. Its total revenue stood at S$375.5 million for the latest period, up 36.2% year-on-year. year-on-year.

The increase in sales is mainly due to a recovery in the aviation sector and the consolidation of Asia Airfreight Terminal Co. Ltd (AAT) from March this year.

Specifically, revenue from its Food Solutions business increased 26.4% year-on-year to S$186.2 million, while Gateway Services revenue increased 49.1% to S$189.3 million. Singapore dollars.

By industry, travel revenue increased 83.8%, while non-travel revenue fell 17.1%.

SAT income

Source: SATS Activity Update Presentation

With a 50.6% increase in group expenses due to increased business activities and the consolidation of AAT, SATS recorded a net loss of S$22.5 million.

Excluding government handouts, the company would have recorded a loss of S$31.9 million for the period, compared to a loss of S$35.6 million a year ago.

As for its outlook, SATS mentioned the following:

“To support our growth on the back of the aviation recovery, we have scaled up our operations and built our resource capacity and capabilities to meet the expected increase in volume. We expect the recovery trajectory continues and accelerates in the second half of this year, but inflation will remain a challenge that we can mitigate through productivity measures.

According to the International Air Transport Association (IATA), a trade association for global airlines, passenger traffic is expected to reach 83% of pre-pandemic levels, while global cargo volumes are expected to reach a record high of 68, 4 million tonnes in 2022. SATS should benefit from the global recovery of the airline sector.

Sabana Industrial REIT (SGX: M1GU)

Sabana Industrial REIT (SGX: M1GU), listed in 2010, is a Shariah-compliant investment REIT.

As of December 31, 2021, Sabana Industrial REIT had a portfolio of 18 properties in Singapore.

These properties belong to the sectors of high-tech industry, warehouse and logistics, chemical warehouse and logistics, as well as the sectors of general industry.

Sabana Industrial REIT

Source: Sabana Industrial REIT Results Presentation

For the first half of 2022, the industrial REIT reported 14.7% year-on-year growth in gross revenue to S$44.9 million, while net property income (NPI) rose 5.2% to S$27.0 million.

The good performance is mainly due to a newly obtained 10-year head lease for 30 and 32 Tuas Avenue 8, which led to an improvement in the portfolio’s occupancy rate of 88.2%, the highest level since the third quarter of 2017.

With that, Sabana Industrial REIT’s DPU rose to 1.59 Singapore cents, up 7.4% from 1.48 cents a year ago.

Donald Han, president and CEO of manager Sabana Industrial REIT, commented on the REIT’s latest results:

“…[O]Our proactive leasing efforts have resulted in sustained rent reversals. It should be noted that the 17.4% reversion in 2Q 2022 is the ninth positive quarterly reversion in the last ten quarters, consistently among the highest in the Singapore industrial REIT sector. It should also be noted that we achieved a 5.8% ROI for the first half of 2022 as our trading price outperformed Singapore REIT benchmarks in volatile market conditions. »

Looking ahead, the REIT is launching its Grow VALUE strategy to achieve a portfolio valuation of over S$1 billion between 2025 and 2027. As of June 30, 2022, its portfolio valuation was just under S$900 million .

Sabana Industrial REIT Strategy

Source: Sabana Industrial REIT Results Presentation

At Sabana Industrial REIT’s unit price of S$0.445, it has a price-to-book (P/B) ratio of 0.86x and a payout yield of 5.9%.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust is a logistics REIT (SGX: M44U) with 185 properties located in countries including Singapore, Australia, China and Vietnam.

Mapletree Logistics Geographic Diversification

Source: Mapletree Logistics Trust Earnings Presentation

Mapletree Logistics Trust’s gross revenue for its fiscal quarter ended June 30, 2022 (1Q FY22/23) increased 14.6% year-on-year to S$187.7 million driven by higher revenue from existing properties and contributions from accretive acquisitions made in FY21/22 and the last quarter.

During the quarter, the REIT acquired two properties – Mapletree (Yuyao) Logistics Park in China and Baeksa Logistics Center in South Korea.

With property spending increasing 24.8% to S$24.4 million, Mapletree Logistics Trust’s NPI for the quarter increased 13.2% year-over-year to S$163.2 million.

Meanwhile, the amount distributable to unitholders climbed 17.2% to S$108.6 million while the distribution per unit (DPU) increased 5% to 2.268 Singapore cents due to a higher number of units in circulation.

Ng Kiat, Managing Director of Mapletree Logistics Trust, said:

“MLT continued to show strong growth, supported by stable occupancy and contributions from an expanded portfolio. However, we are aware of the growing economic headwinds that will impact our tenants and our costs. We will remain vigilant and focused on maintaining portfolio stability while pursuing our portfolio rejuvenation strategy. In Singapore, the redevelopment of 51 Benoi Road will add a high-quality ramp-up facility with a 2.3-fold increase in gross floor area to 887,000 square feet, further strengthening our competitive position.

At Mapletree Logistics Trust’s unit price of S$1.71, it has a P/E ratio of 1.08x and a payout yield of 4.8%.

Mapletree North Asia Commercial Trust (SGX: RW0U)

Mapletree North Asia Commercial Trust (SGX: RW0U) has commercial properties located in China, Hong Kong, Japan and South Korea.

Its portfolio is valued at S$8.1 billion (as of June 30, 2022) and consists of 13 properties such as:

  • Gateway Plaza (a Grade A office building in Beijing, China),
  • Festival Walk (a shopping mall with offices in Hong Kong), and
  • Sandhill Plaza (a Grade A business park development in Shanghai, China).

Mapletree Real Estate Portfolio in North Asia

Source: Mapletree North Asia Commercial Trust Business Update Presentation

For the first quarter ended June 30, 2022 (1Q FY22/23), Mapletree North Asia Commercial Trust’s gross revenue increased 1.6% year-on-year to S$104.7 million, while its NPI increased increased by 4.1% to S$81.5 million.

The REIT said the NPI’s growth was largely due to the contribution from Hewlett-Packard Japan’s headquarters, which was acquired in June 2021, and a lower amount of lease relief given to the Festival Walk.

Festival Walk continues to be the largest contributor to Mapletree North Asia Commercial Trust’s gross revenue, at over 40%.

Mapletree North Asia Commercial Trust will merge with Mapletree Commercial Trust (SGX: N2IU) to form Mapletree Pan Asia Commercial Trust, becoming one of the ten largest REITs in Asia. Mapletree North Asia Commercial Trust is expected to be delisted on August 3, 2022 following the merger.

Mapletrue North Asia Business Merger

Source: Mapletree North Asia Commercial Trust Business Update Presentation

At the North Asia Commercial Trust unit price of S$1.20, it has a P/E ratio of 0.92x and a payout yield of 5.7%.

Read also : 5 SREITs institutions are buying (more than selling) in 2022 YTD

This article was written by Sudhan Pan investment analyst who has been an avid investor in publicly traded companies for over a decade now and is a strong advocate for investor education.

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