Frasers Logistics and Commercial Trust’s 2H Fiscal 2022 Results Below Expectations; FVE to SGD 1.24

Frasers Logistics and Commercial Trust’s, or FLCT’s, second-half fiscal-year 2022 (ending September) results were below our expectations with net property income, or NPI, coming in 11% below our estimates. The miss is largely due to 1) the further strengthening of the Singapore dollar against the Australian dollar, euro, and British pound, 2) timing differences in the booking of service charge expenses following a service charge reconciliation exercise, and 3) additional landlord costs for its Europe assets. Nevertheless, second-half distribution per unit, or DPU, fell only 2.8% year-on-year despite a 11.6% year-on-year decline in second-half NPI (partly due to the loss of contribution from the divested Cross Street Exchange), aided by lower finance expense and management’s decision to distribute divestment gains of SGD 5.35 million.