Financials

Full Year Unaudited Financial Statements & Distribution Announcement 2017

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

2017 FULL YEAR 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 4Q 2017 includes the full quarter contribution from Siloam Hospitals Labuan Bajo ("SHLB") which was acquired in December 2016, and maiden contribution from Siloam Hospitals Buton and Lippo Plaza Buton ("SHBN") and Siloam Hospitals Yogyakarta ("SHYG") which were acquired in October 2017 and December 2017 respectively.

  1. Property operating expenses for 4Q 2017 increased by 85.8% to S$561,000 compared to 4Q 2016 mainly due to higher expenses incurred for Sarang Hospital and Indonesia properties.
  2. Interest income for 4Q 2017 increased to S$437,000 compared to 4Q 2016 mainly due to the returns from progress payments for the development of new Siloam Hospitals Surabaya.
  3. Finance costs for 4Q 2017 increased to S$4.9 million compared to 4Q 2016 mainly due to higher loan amounts to finance the acquisition of SHLB in 4Q 2016, second progress payment for development of new Siloam Hospitals Surabaya in 3Q 2017 and acquisition of SHBN and SHYG in 4Q 2017.
  4. Other expenses for 4Q 2017 decreased to S$1.0 million compared to 4Q 2016 mainly due to unrealised exchange gain on USD loan offset by higher professional fee and expenses related to Medium Term Note ("MTN") exercise.
  5. Net fair value gains on investment properties for 4Q 2017 of S$13.4 million compared to net fair value losses on investment properties for 4Q 2016 was mainly due to gain on revaluation of Indonesia properties.
  6. Net change in fair value of derivative financial instruments for 4Q 2017 relates to the revaluation gains on the interest rate swap contracts.
  7. Income tax expenses for 4Q 2017 decreased to S$6.9 million compared to 4Q 2016 mainly due lower provision for deferred taxation on fair value gain on investment properties partly offset by higher current tax expenses.

Statements of Financial Position

Note:

  1. Investment properties increased from S$1,273.2 million to S$1,349.3 million and investment in subsidiaries increased from S$756.5 million to S$804.5 million mainly due to acquisition of SHBN in October 2017 and SHYG in December 2017 and fair value gains of S$13.4 million.
  2. Other receivable, non-current increased from S$18.0 million to S$27.0 million mainly due to the second progress payment made for development of new Siloam Hospitals Surabaya in August 2017.
  3. Trade and other receivables, current increased from S$11.8 million to S$26.0 million mainly due to the advance rental receivables from tenants.
  4. Other financial liabilities, non-current and current increased from S$413.6 million to S$476.4 million mainly due to higher loan amounts to finance the second progress payment for development of new Siloam Hospitals Surabaya, and the acquisition of SHBN and SHYG.

Review of the performance

4Q 2017 vs 4Q 2016

The results for this quarter includes the full quarter contribution from Siloam Hospitals Labuan Bajo ("SHLB") which was acquired in December 2016, and maiden contribution from Siloam Hospitals Buton and Lippo Plaza Buton ("SHBN") and Siloam Hospitals Yogyakarta ("SHYG") which were acquired in October 2017 and December 2017 respectively.

Gross revenue for 4Q 2017 increased by 5.8% to S$28.6 million compared to 4Q 2016, mainly due to contribution from SHLB, SHBN and SHYG as well as from existing properties.

Property operating expenses for 4Q 2017 increased by 85.8% to S$561,000 compared to 4Q 2016 mainly due to higher expenses incurred for Sarang Hospital and Indonesia properties.

Interest income for 4Q 2017 increased to S$437,000 compared to 4Q 2016, mainly due to the returns from progress payments for the development of new Siloam Hospitals Surabaya.

Manager's management fees for 4Q 2017 increased by 4.1% to S$2.8 million compared to 4Q 2016, mainly due to higher property income and total assets.

Finance costs for 4Q 2017 increased to S$4.9 million compared to 4Q 2016 mainly due to higher loan amounts to finance the acquisition of SHLB in 4Q 2016, second progress payment for development of new Siloam Hospitals Surabaya in 3Q 2017 and acquisition of SHBN and SHYG in 4Q 2017.

Other expenses for 4Q 2017 decreased to S$1.0 million compared to 4Q 2016 mainly due to unrealised exchange gain on USD loan offset by higher professional fees and expenses related to MTN exercise.

Net change in fair value of derivative financial instruments for 4Q 2017 relates to the revaluation on the interest rate swap contracts.

Income tax expenses for 4Q 2017 decreased to S$6.9 million compared to 4Q 2016 mainly due lower provision for deferred taxation on fair value gain on investment properties partly offset by higher current tax expenses.

Total return after tax for 4Q 2017 increased as compared to 4Q 2016, mainly due to the fair value gains on revaluation of investment properties. Excluding fair value losses/gains on revaluation of investment properties net of deferred tax, net changes in fair value of derivative financial instruments and unrealised exchange loss/(gain) from USD loan, total return after tax for 4Q 2017 will decrease by 2.0% to S$14.8 million compared to Q4 2016 of S$15.1 million mainly due to expenses incurred for MTN exercise.

FY 2017 vs FY 2016

Gross revenue for FY 2017 increased by 3.7% to S$111.0 million compared to FY 2016, mainly due to contribution from SHLB, SHBN and SHYG as well as from existing properties.

Property operating expenses for FY 2017 increased by 28.3% to S$1.5 million compared to FY 2016, mainly due to the higher property expenses incurred for Sarang Hospital and Indonesia properties.

Interest income for FY 2017 increased to S$1.4 million compared to FY 2016, mainly due to the returns from progress payments for the development of new Siloam Hospitals Surabaya.

Manager's management fees for FY 2017 increased by 2.8% to S$10.9 million compared to FY 2016, mainly due to the higher net property income and total assets.

Other expenses for FY 2017 decreased by 68.2% to S$1.1 million compared to FY 2016, mainly due to absence of costs related to Siloam Hospitals Surabaya transaction incurred in 1Q 2016 and higher unrealised exchange gain from the USD loan.

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

Income tax expenses for 4Q 2017 decreased to S$20.1 million compared to 4Q 2016 mainly due to lower provision for deferred taxation on fair value on investment properties partly offset by higher current tax expenses.

Total return after tax for FY 2017 increased by 82.0% to S$73.4 million compared to FY 2016, mainly due to the fair value gain on revaluation of investment properties as well as lower net losses in fair value of derivative financial instruments. Excluding fair value losses/gains on revaluation of investment properties net of deferred tax, net changes in fair value of derivative financial instruments, unrealised exchange gain from USD loan and gain on divestment of Plot B of existing Siloam Hospitals Surabaya, total return after tax for FY 2017 increased by 5.1% to S$61.4 million compared to FY 2016 of S$58.4 million mainly due to contribution from the newly acquired properties.

Commentary on the competitive conditions of the industry

The Indonesia gross domestic product grew 5.06%1 year-on-year in the third quarter of 2017, compared with 5.01% in the first and second quarters. This was led mainly by a 3.46% rise in government spending and a 7.11% rise in investment in the third quarter. Over the course of 2017, Bank Indonesia has been very supportive of economic growth and lending, having cut interest rates eight times in 2017. Looking into 2018, the government expects Indonesia's economy to grow by 5.4%2, supported by an export recovery and rising investment, especially with its investment grade rating from the three major rating agencies.

Against the stronger economic outlook and the on-going national health insurance scheme, demand for better quality private healthcare will continue to grow steadily. First REIT remains well-postioned for further growth, with a strong acquisition pipeline of 39 hospitals in Indonesia from its Sponsor, PT Lippo Karawaci Tbk.

  1. 7 November 2017, Business Times - Indonesian economy still sluggish despite interest rate cuts
  2. 17 August 2017, Straits Times - Indonesia's economy to grow by 5.4%

Print This Email This