Net property income (NPI) fell 17.6% to $17.9 million from $14.1 million in 4Q16 for similar reasons. The lower NPI was also due to a $1.1 million provision for impairment for other receivables at Fu Zhuo Industrial, which has no impact on EC World REIT’s DPU.
Nonetheless, income available for distribution grew 3.6% to $11.8 million from $11.4 million previously as the REIT’s foreign exchange losses fell to $0.5 million compared to $1.5 million a year ago.
The latest 4Q DPU brings EC World REIT’s DPU for the full year to $6.025 cents, which is more than double of its FY16 DPU of 2.454 cents and exceeds the forecasted DPU by by 1.5%.
The manager attributes the strong FY17 DPU growth to strong operating performance of the REIT’s underlying asset portfolio, as well as favourable exchange rate movement vis-à-vis the forecasted exchange rate.
“We are pleased that ECW delivered forecast beating results for the second year running. This is a testament to the quality and stability of the ECW’s asset portfolio as well as our active asset management and prudent financial management strategies. The strong performance also lays a solid foundation for us to expand our portfolio in the coming year,” says Goh Toh Sim, executive director and acting CEO of the manager.
As at end 2017, EC World REIT’s aggregate leverage was 29.2%, which the manager says provides the REIT with ample debt headroom for growth and future acquisitions.
Looking ahead, the manager targets to increase EC World REIT’s asset portfolio through yield-accretive acquisitions from the pipeline of right of first refusal (ROFR) assets from its sponsor, as well as third party logistics assets in China as well as in fast-growing markets in Southeast Asia.
Units in EC World closed 1 cent higher at 76 cents on Wednesday.
