Financials

First Quarter Financial Statement And Dividend Announcement 2017

Financials Archive

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2017 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS & DISTRIBUTION ANNOUNCEMENT

Summary of First REIT's Results

Note:

  1. Actual distribution paid for FY 2016.

Statement of Comprehensive Income

Note:

NM - Not meaningful

The results for 1Q 2017 includes the full quarter contribution from Siloam Hospitals Labuan Bajo ("SHLB") which was acquired in December 2016.

  1. Interest income for 1Q 2017 increased to S$310,000 compared to 1Q 2016 mainly due to the return from the first progress payment made in 1Q 2016 for the development works on new Siloam Hospitals Surabaya.
  2. Finance costs for 1Q 2017 decreased to S$4.3 million compared to 1Q 2016 mainly due to the lower loan amounts as a result of the issuance of perpetual securities to pare down the loan amounts in 3Q 2016.
  3. Other income for 1Q 2017 as compared to other expenses for 1Q 2016 mainly due to the absence of expenses for Multi-currency Medium Term Note ("MTN") exercise and the costs for Siloam Hospitals Surabaya transaction which were incurred in 1Q 2016.
  4. Gains on divestment of investment property relates to the divestment of Plot B of the existing Siloam Hospitals Surabaya in 1Q 2016.
  5. Net change in fair value of derivative financial instruments relates to the revaluation of interest rate swap contracts.
  6. Income tax expenses for 1Q 2017 decreased to S$4.3 million compared to 1Q 2016 mainly due to the tax paid in relation to the divestment of Plot B of existing Siloam Hospitals Surabaya in 1Q 2016.

Statements of Financial Position

Note:

  1. Trade and other receivables increased from S$11.8 million to S$18.2 million mainly due to advance rental receivables from tenants.
  2. In 2016, the Trust issued S$60.0 million of fixed rate perpetual securities. The perpetual securities may be redeemed at the option of the Trust in whole, but not in part, on 8 July 2021 or each successive date falling every five years thereafter and otherwise upon the occurrence of certain redemption events specified in the terms and conditions. The perpetual securities, net of issuance costs and includes amount reserved for distribution to the perpetual securities holders, are classified as equity in the Statements of Changes in Unitholders' Funds.

Review of the performance

1Q 2017 vs 1Q 2016

The results for this quarter includes the full quarter contribution from First REIT's latest property, Siloam Hospitals Labuan Bajo ("SHLB") which was acquired in December 2016.

Gross revenue for 1Q 2017 increased by 2.5% to S$27.2 million compared to 1Q 2016, mainly due to the contribution from SHLB.

Interest income for 1Q 2017 increased to S$310,000 compared to 1Q 2016, mainly due to the return from the payment of the first progress payment in 1Q 2016 for the development works on new Siloam Hospitals Surabaya.

Finance costs for 1Q 2017 decreased by 7.1% to S$4.3 million compared to 1Q 2016, mainly due to the lower loan amounts as a result of the issuance of perpetual securities to pare down the loan amounts in 3Q 2016.

Other income for 1Q 2017 as compared to other expenses for 1Q 2016, mainly due to absence of the expenses for the MTN exercise and the costs related to Siloam Hospitals Surabaya transaction incurred in 1Q 2016.

Net change in fair value of derivative financial instruments relates to the revaluation of interest rate swap contracts.

Income tax expense for 1Q 2017 decreased by 5.7% to S$4.3 million compared to 1Q 2016, mainly due to the tax incurred for the divestment of Plot B of existing Siloam Hospitals Surabaya in 1Q 2016.

Commentary on the competitive conditions of the industry

Indonesia remains First REIT's key focal market for growth, especially with the expanding pipeline of over 40 hospitals from its Sponsor, PT Lippo Karawaci Tbk, for acquisition. Southeast Asia's largest economy, Indonesia's gross domestic product grew 5.02% in 2016, an improvement from 4.88% in 20151. For 2017, International Monetary Fund is also forecasting a growth of 5.1%2, driven by government's reforms and infrastructure developments. Meanwhile, the healthcare sector remains supported by the ongoing national health insurance scheme, which now allows more affluent Indonesians to supplement coverage under the scheme with private health insurance, lending further weight to private healthcare spending.

  1. 7 February 2017, The Straits Times – Indonesia's GDP growth slows to 4.9% in Q4
  2. 3 February 2017, International Monetary Fund – Indonesia: Resilient economy can benefit from stronger reforms

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