As earnings season continues, here are the earnings summaries from another three businesses.
Lendlease Global Commercial REIT (SGX: JYEU)
Lendlease Global Commercial REIT, or LREIT, invests in real estate assets globally that are used for retail or office purposes.
The REIT’s property portfolio consists of a leasehold interest in 313 Somerset, a mall located in Singapore’s Orchard Road, and a freehold interest in Sky Complex, three grade-A office buildings located in Milan, Italy.
The REIT also owns a 5% interest in Jem, an integrated office and retail development in Singapore.
For its fiscal year 2021 (FY2021) ended 30 June 2021, LREIT’s gross revenue inched up by 5.6% year on year to S$78.7 million.
Net property income (NPI) increased by 5.4% year on year to S$56.9 million and distribution per unit (DPU) jumped by 14.6% year on year to S$0.0468.
The REIT’s portfolio occupancy remained high at 99.8% while its weighted average lease expiry (WALE) by net lettable area stood at 8.8 years.
The gearing ratio of the REIT is at 32% with a low cost of debt at just 0.88%, allowing the REIT headroom to borrow more for accretive acquisitions to boost DPU.
LREIT is developing a multi-functional event space adjacent to 313 Somerset in partnership with Live Nation, a live entertainment company, to offer unique food concepts and serve as a venue for concerts and events.
In a move that is yield accretive, LREIT has acquired an additional interest in Jem that will raise its effective indirect interest to 31.8%.
This move is aimed at boosting income diversification and resilience as the office component of Jem is 100% leased to a Singapore government ministry with a WALE of 24 years. This transaction will increase the REIT’s gearing to 33.8%.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a global real estate company with a network that spans 112 locations in 29 countries and regions.
The group’s geographically diverse portfolio comprises residential, offices, hotels, shopping malls and integrated developments, and is worth around S$24.5 billion as of 30 June 2021.
The property conglomerate’s fiscal 2021 first half (1H2021) earnings saw an improvement in all business segments except for hotel operations.
For context, in the previous fiscal year, CDL reported a massive S$1.9 billion loss due to the impairment of its stake in China’s Sincere Property Group.
Revenue for 1H2021 improved by 11.1% year on year to S$1.2 billion, although profit before tax fell by 29.3% year on year to S$9.7 million due to significantly higher net finance costs.
The group reported a net loss of S$32.1 million due to higher tax expenses and the absence of a substantial deferred tax credit (S$17.6 million) in New Zealand.
CDL intends to leverage its GET (growth, enhancement and transformation) strategy to accelerate the transformation of its asset portfolio and spur growth.
The property developer plans to launch around 2,000 residential units in Singapore, ranging from mass-market to high-end projects.
Asset enhancement initiatives are planned for Palais Renaissance to revamp its common areas and add more alfresco food and beverage areas.
And the plan is still on the table for CDL to list its UK commercial assets, subject to regulatory approvals and market conditions.
Wilmar International Limited (SGX: F34)
Wilmar is a leading agribusiness group with an integrated model that encompasses the entire value chain for the agricultural commodity business.
The group has over 500 manufacturing plants and an extensive network covering some 50 countries and regions.
For 1H2021, Wilmar reported a 30.4% year on year jump in revenue to US$29.5 billion.
Core net profit climbed by 15.2% year on year to US$732.2 million, and the group declared an interim dividend of S$0.05, up 25% year on year and its highest interim dividend since its listing.
In terms of business segments, Wilmar’s food products division saw revenue climbing by 31% year on year to US$13.6 billion, in line with a 9% year on year increase in sales volume to 13.3 million metric tonnes.
However, profit before tax (PBT) for the division declined by 13% year on year due to narrower margins arising from higher commodity prices.
The situation was reversed at its feed and industrial division, where sales volume fell 1% year on year but revenue and PBT surged by 33% and 29% year on year, respectively.
The segment benefitted from good refining margins and higher demand for its products.
Elsewhere, Wilmar’s plantation and sugar milling division also enjoyed a strong performance, with revenue soaring 54% year on year that saw the segment turning in a profit of US$164 million.
CEO Kuok Khoon Hong believes that the group should continue to perform well, as Wilmar’s diversified operations mean that weakness in one area can be offset by good performance in others.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.