Frasers Centrepoint Trust Earnings: Results in Line; Robust Leasing Performance To Drive Growth

Narrow-moat Frasers Centrepoint Trust’s, or FCT’s, first-half fiscal 2023 (ending September) results were in line with our expectations. Gross revenue and net property income improved 6.5% and 5.7% year on year to SGD 188 million and SGD 138 million, respectively, making up 50.5% and 51.7% of our full-year estimate. However, finance costs increased ahead of our expectations, rising 75.3% year on year to SGD 35.7 million, resulting in a relatively flat distribution per unit of SGD 0.0613. We fine-tune our assumptions to factor in the stronger leasing performance and a higher near-term cost of debt for the rest of fiscal 2023, leading to 1.2% downward revision in our full-year DPU to SGD 0.1227. Our fair value estimate of SGD 2.38 remains, and we think the trust is fairly valued at the current price.