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Financials

First Quarter Financial Statement And Dividend Announcement 2018

Financials Archive

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2018 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS & DISTRIBUTION ANNOUNCEMENT

Summary of First REIT's Results

Note:

  1. Actual distribution paid for FY 2017

Statement of Comprehensive Income

Note:

NM - Not meaningful

The results for 1Q 2018 includes the full quarter contribution from Siloam Hospitals Buton & Lippo Plaza Buton ("Buton Property") and Siloam Hospitals Yogyakarta ("SHYG") which were acquired in 4Q 2017.

  1. Interest income for 1Q 2018 increased to S$417,000 compared to 1Q 2017 mainly due to the returns from the progress payments for the development of new Siloam Hospitals Surabaya.
  2. Finance cost for 1Q 2018 increased to S$4.8 million compared to 1Q 2017 mainly due to higher loan amounts drawn down to finance the acquisition of Buton Property and SHYG in 4Q 2017 and the second progress payment for development of new Siloam Hospitals Surabaya in 3Q 2017.
  3. Other expenses for 1Q 2018 of S$332,000 as compared to other income for 1Q 2017 mainly due to lower unrealised exchange gain on USD loan.
  4. Net change in fair value of derivative financial instruments for 1Q 2018 relates to the termination and revaluation of interest rate swap contracts.
  5. Income tax expense for 1Q 2018 increased to S$4.6 million compared to 1Q 2017 mainly due to higher revenue.

Statements of Financial Position

Note:

  1. Trade and other receivables increased from S$26.0 million to S$31.3 million mainly due to advance rental receivables from tenants.

Review of the performance

1Q 2018 vs 1Q 2017

The results for this quarter includes the full quarter contribution from Siloam Hospitals Buton & Lippo Plaza Buton ("Buton Property") and Siloam Hospitals Yogyakarta ("SHYG") which acquired in 4Q 2017 respectively.

Gross revenue for 1Q 2018 increased by 5.8% to S$28.7 million compared to 1Q 2017 mainly due to contribution from Buton Property and SHYG as well as existing properties.

Interest income for 1Q 2018 increased to S$417,000 compared to 1Q 2017 mainly due to the returns from the progress payments for the development of new Siloam Hospitals Surabaya.

Manager's management fees for 1Q 2018 increased by 6.2% to S$2.8 million compared to 1Q 2017, mainly due to higher net property income and total assets.

Trustee fees for 1Q 2018 increased by 7.1% to S$105,000 compared to 1Q 2017 mainly due to higher total assets.

Finance cost for 1Q 2018 increased to S$4.8 million compared to 1Q 2017 mainly due to higher loan amounts drawn down to finance the acquisition of Buton Property and SHYG in 4Q 2017 and the second progress payment for development of new Siloam Hospitals Surabaya in 3Q 2017.

Other expenses for 1Q 2018 of S$332,000 as compared to other income for 1Q 2017 mainly due to lower unrealised exchange gain on USD loan.

Net change in fair value of derivative financial instruments for 1Q 2018 relates to the termination and revaluation of interest rate swap contracts.

Income tax expense for 1Q 2018 increased to S$4.6 million compared to 1Q 2017 mainly due to higher revenue.

Commentary on the competitive conditions of the industry

Indonesia achieved a 5.19% year-on-year growth in its gross domestic product for the fourth quarter of 2017, and a growth of 5.07% for the full year, recording the highest growth since 20131. Consumption, the biggest contributor to Indonesia's economy, picked up pace in the last quarter of 2017, driving higher growth in the economy. Overall in 2017, Bank Indonesia also provided sustained support to the economy by cutting interest rates eight times. In a bid to reduce the economy's reliance on consumption as a growth engine, the Indonesian government has rolled out a series of deregulation measures to attract more investment. Bank Indonesia expects the economy to grow 5.10% in the first quarter of 20182.

Demand for private healthcare in Indonesia continues to rise with the growing nationwide adoption of the national health insurance scheme. As such, First REIT remains well-positioned for further growth, with a strong acquisition pipeline of around 40 hospitals in Indonesia from its Sponsor, PT Lippo Karawaci Tbk.

  1. 6 February 2018, The Straits Times - Indonesia grows at best pace in 4 years, but consumption still weak
  2. 27 March 2018, Business Times - Indonesia Q1 GDP growth seen at 5.1% y-o-y: Center bank deputy governor

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