GLP FY2013 Earnings Up 27% To US$684 Million

GLP reported robust results for the year ended 31 March 2013. FY13 PATMI rose 27% to US$684 million, driven by strong development momentum and rent growth in China. FY13 Group revenue rose 14% year-on-year to US$642 million, driven by development completions and continued rental growth in China.

•  FY13 EBIT up 30%, driven by 39% growth in China
•  FY13 development starts ahead of target, reaching 2.7 million sqm (29 million sq ft); FY14 target of 3.2 million sqm (34 million sq ft)
•  Strengthened balance sheet with low leverage[1] of 8.2%
•  Board of Directors recommends a dividend of 4 SGD cents per ordinary share, an increase of 33% on last year’s dividend

 

US$ million	3-month ended 31 Mar 2013 (4QFY13)	3-month ended 31 Mar 2012 (4QFY12)	Change	Year ended 31 Mar 2013 (FY13)	Year ended 31 Mar 2012 (FY12)	Change
Revenue	125	153	(18%)	642	566	14%
EBIT	252	221	14%	908	701	30%
PATMI	224	157	43%	684	541	27%
Diluted EPS (¢)	4.53	3.21	41%	13.95	11.53	21%

 

Singapore, 23 May 2013 – Global Logistic Properties Limited (“GLP”), one of the world’s leading providers of modern logistics facilities, with a market-leading position in China, Japan and Brazil, reported robust results for the year ended 31 March 2013 (“FY13”). FY13 PATMI rose 27% to US$684 million, driven by strong development momentum and rent growth in China.

FY13 Group revenue rose 14% year-on-year to US$642 million, driven by development completions and continued rental growth in China. Revenue in China was US$252 million, up 58% year-on-year. Japan revenue was US$388 million, 4% lower than the same period last year following income loss from the contribution of 33 properties to GLP J-REIT in 4QFY13 and depreciation of the Japanese Yen (“JPY”) offset by substantial growth in fund management revenue.

FY13 Group EBIT and PATMI rose 30% and 27% respectively, driven by higher revenue and revaluation gains of US$425 million from investment properties and jointly-controlled entities. China EBIT grew by 39%, with PATMI up 28%. In Japan, EBIT and PATMI were up 3% and 4% respectively.

Mr. Jeffrey H. Schwartz, Co-Founder of GLP and Chairman of the Executive Committee, said: “The last year has been one of growth and evolution for GLP. We are now the leading provider in the world’s three best markets for logistics, all of which present outstanding growth opportunities for GLP. The J-REIT IPO has markedly strengthened our balance sheet and provides us with significant capital for further investment. Moreover, our best-in-class fund management platform, which tripled in size last year, enables us to continue to scale our business while delivering superior risk-adjusted returns.

“Looking forward, we intend to build on the achievements of the past year and strengthen our leading positions in China, Japan and Brazil as we continue to create value for our shareholders.”

The Board has proposed the payment of a tax-exempt (one-tier) final dividend of 4 SGD cents per ordinary share in respect of FY13, 33% higher than last year. The proposed dividend, subject to shareholders’ approval at the Annual General Meeting, constitutes a payout ratio[2] of 44%.

Results for 4QFY13
In terms of quarterly results, Group revenue in the three months ended 31 March 2013 (“4QFY13”) was 18% lower, largely due to the contribution of Japan properties to GLP J-REIT. Group EBIT was up 14%, boosted by a 33% increase in China. 4QFY13 Group PATMI was up 43% to US$224 million, driven by revaluation gains of US$164 million for investment properties and jointly-controlled entities and a US$28.8 million foreign exchange gain arising from hedging cash proceeds from the contribution of assets to the J-REIT. Fund management revenue continued to register strong growth, rising 85% quarter-on-quarter to US$12 million.

Results Adjusted for J-REIT Impact
In December 2012, GLP listed GLP J-REIT, Japan’s largest real estate initial public offering (“IPO”) in dollar terms. GLP transferred 33 properties to GLP J-REIT. Adjusting for the impact arising from the sale to the J-REIT, 4QFY13 Group revenue was up 7% year-on-year, with Group EBIT and Group PATMI rising 38% and 91% respectively.

Strong Development Momentum
GLP’s strong operational momentum continued in 4QFY13, across the business.

The stabilized lease ratio in China remained at 90%, with the domestic consumption-focused portfolio 96% leased. Rents rose 4% year-on-year to 1.07 RMB/sqm/day and FY13 same-store net operating income was up 7.4% year-on-year. Growth in developments and acquisitions led to a 27% year-on-year growth in NAV to US$4.4 billion.  China now represents 53% of Group NAV, up from 45% last year.

GLP commenced 504,000 sqm (5.4 million sq ft) of new developments in China in 4QFY13. During the year, GLP exceeded its target of 2 million square metres (“sqm”) (21.5 million square feet (“sq ft”)) and initiated new developments of 2.1 million sqm (22.6 million sq ft). For FY14, GLP expects to start 2.5 million sqm (27 million sq ft) of new developments for a total estimated investment of US$1.2 billion.

Land purchases in China also increased significantly during the year, with a total of 4.2 million sqm (45.2 million sq ft) acquired, 213% higher than last year. All the land acquired in FY13 was converted from GLP’s land reserve, which now stands at 10.5 million sqm (113 million sq ft), almost 20% more than last year, providing a strong pipeline for future development. GLP’s current network covers 15 million sqm (161.5 million sq ft) across 33 cities.

New and expansion leases signed in China during 4QFY13 totaled 469,000 sqm (5 million sq ft), driven by continued strong demand from the third-party logistics (“3PL”) industry. Major new leases signed included 170,000 sqm (1.8 million sq ft) at four separate parks to Deppon Logistics, one of China’s largest 3PL providers. Deppon Logistics is GLP’s second-largest customer in China by leased area and has tripled its lease area with GLP in the last two years. Other new leases included 43,000 sqm (463,000 sq ft) in Suzhou and Wuhan to Best Logistics and 15,600 sqm (168,000 sq ft) in Beijing to Cardinal Health.

For the year, new and expansion leases totaled 1.4 million sqm (15.1 million sq ft), higher than total completions of 1.2 million sqm (12.9 million sq ft). Demand for modern logistics facilities remained strong, with average lease ratios for our newly completed properties reaching 86% within six months of completion. Customers continue to expand with 73% of space leased in 4QFY13 taken up by existing customers.

GLP’s portfolio in Japan encompasses 84 completed properties with a total gross floor area of 3.6 million sqm (38.8 million sq ft). The lease ratio remains high at 99%, with a high tenant retention rate of 80%. Rents remained stable at JPY1,083/sqm/month.

GLP Soja, a 78,000 sqm (840,000 sq ft) facility in Hiroshima, is the first completed project under GLP Japan Development Venture, GLP’s 50:50 joint venture with Canada Pension Plan Investment Board (“CPPIB”). Leasing is ahead of schedule, with the project’s lease ratio currently standing at 51%. Demand is also strong at GLP Misato III, a 95,000 sqm (1 million sq ft) facility in Greater Tokyo which is 65% pre-leased, ahead of its projected lease-up schedule and prior to building completion later this month.

In 4QFY13, GLP initiated development of GLP Ayase, a 68,400 sqm (736,000 sq ft) facility in Greater Tokyo. During the year, development starts in Japan totaled 465,000 sqm (5 million sq ft), ahead of the company’s target. For FY14, GLP expects to begin developments of approximately 400,000 sqm (4.3 million sq ft). The total development cost for these new projects is estimated to be about US$670 million.

The stabilized properties in GLP Brazil Income Partners I are 100% leased, with a long weighted average lease expiry period of more than eight years. Under GLP Brazil Development Partners I, the first completed building at GLP Guarulhos in São Paulo comprising 31,000 sqm (334,000 sq ft) has been delivered to a leading global automotive corporation. GLP Guarulhos will be Brazil’s best master planned logistics park comprising 17 buildings across 390,000 sqm (4.2 million sq ft) when it is completed in 2017.

GLP started developments of 101,000 sqm (1.1 million sq ft) in Brazil during 4QFY13. In FY14, the Group is targeting to initiate 310,000 sqm (3.3 million sq ft) of development starts for a total estimated investment of US$290 million.

Ming Z. Mei, Co-Founder and Chief Executive Officer of GLP, said: “GLP has made great strides in FY13, reporting ongoing operational momentum and portfolio growth, and I am pleased that this has continued into the last quarter.

“GLP continues to benefit from the growth of domestic consumption, particularly in China and Brazil, while in Japan the ongoing reconfiguration of its supply chain drives demand for our modern logistics facilities. 84% of our overall portfolio is leased to domestic consumption related customers and we continue to see robust demand from 3PL providers and retailers, including e-commerce. High levels of demand in each of our markets are not being met by an adequate supply of modern logistics facilities, making GLP – the market-leader in China, Japan and Brazil – ideally-positioned to benefit. We look forward to continued progress in the year ahead.”

Fund Management Platform More Than Tripled
GLP’s fund management platform has grown considerably during FY13, as the Group successfully listed GLP J-REIT, more than doubled the size of GLP Japan Development Venture to US$2.2 billion and established the market-leading logistics platform in Brazil in partnership with CPPIB, China Investment Corporation and Government of Singapore Investment Corporation.

As at 31 March 2013, total assets under management (“AUM”) stood at US$8.4 billion, compared to US$2.6 billion last year. Of this, US$6.0 billion has been invested, in both Japan and Brazil, with a further US$2.4 billion of committed investment. Fund management revenues in 4QFY13 grew almost eight fold over the previous year to US$12 million. This comprised asset and property management fees of US$9 million and development fees of US$3 million. Fund fees are expected to continue increasing in tandem with the growth of the fund management platform.

Capital Markets Activities
During the year, GLP refinanced US$1.1 billion of yen-denominated debt and secured a 10-year US$1 billion credit facility at a preferential interest rate with China Merchants Bank. Besides lowering interest costs, the Group’s weighted average debt maturity has been extended to 5.2 years, up from 2.8 years a year earlier. 68.5% of GLP’s debt matures beyond FY2016. Fixed rate borrowings constituted 74.3% of GLP’s total borrowings as of 31 March 2013.

GLP’s balance sheet remains strong, with net debt of US$925 million, 64% lower than last year. Following the successful listing of GLP J-REIT and monetization of assets in Japan, the Group’s net debt to assets stands at 8.2%.

 

Earnings briefing information
A briefing for investors and analysts is scheduled on Thursday 23rd May 2013 at 6pm Singapore time. Please dial +65 6723 9381 to join the briefing (passcode: 35501342) or visit our website (ir.glprop.com) to access our webcast for the event. A replay of the briefing will also be available on our website within 24 hours of the live event.

Global Logistic Properties (www.glprop.com)
Global Logistic Properties (“GLP”) is one of the world’s leading providers of modern logistics facilities, with a market-leading position in China, Japan and Brazil. Our property portfolio of 21 million square meters (226 million square feet) is strategically located across 62 cities, forming an efficient logistics network serving almost 700 customers. We are dedicated to improving supply chain infrastructure for the world’s most dynamic manufacturers, retailers and third party logistics companies. Domestic consumption is a key driver of demand for GLP.

The Group is listed on the Mainboard of Singapore Exchange Securities Trading Limited (SGX stock code: MC0.SI; Reuters ticker: GLPL.SI; Bloomberg ticker: GLP SP; Company registration number: 200715832Z).

Investor Relations & Media Contact:
Ambika Goel, CFA
SVP- Capital Markets and Investor Relations
Tel: +65 6643 6372
Email: agoel@glprop.com

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