Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

1H FY 2022 vs 1H FY 2021

Total property income for 1H FY 2022 increased by ₹512 million (10%) to ₹5.8 billion mainly due to:

  • income from aVance 6 at aVance Hyderabad, which was acquired in March 2021;
  • income from Building Q1, which was acquired in November 2021;
  • income from Arshiya Warehouse 7, which was acquired in March 2022;
  • income from Industrial Facility in Mahindra World City, which was acquired in May 2022; and
  • higher utilities and carpark income compared to the same period last year.

In SGD terms, total property income increased by 8% to S$13.3 million. The SGD appreciated by about 1% against the INR over the same period last year.

Total property expenses increased by 11% to ₹1.1 billion (S$19.9 million) mainly due to (i) reversal of expected credit loss of ₹28.3 million in 1H FY 2021, (ii) higher operational and maintenance expenses across the portfolio, and partially offset by lower utilities expenses in current period.

Net property income for 1H FY 2022 increased by 9% to ₹4.6 billion (S$83.4 million) due to the above factors.

Trustee-manager's fees increased by ₹59 million (13%) to ₹512 million (S$9.2 million), which is in-line with higher net property income and portfolio value as of 30 June 2022.

Other operating expenses decreased by ₹48 million (32%) to ₹104 million (S$1.9 million) mainly due to higher CSR expenses in 1H FY 2021.

Finance costs increased by ₹313 million (24%) to ₹1.6 billion (S$29.4 million) mainly due to an increase in borrowings.

Interest income decreased by ₹12 million (1%) to ₹1.4 billion (S$25.7 million) mainly due to discontinuance of interest income after acquisition of Arshiya Warehouse 7 and Industrial Facility in Mahindra World City, while partially offset by higher interest income from investments in aVance 5, GardenCity, and BlueRidge 3.

Realised gain on derivative financial instruments for 1H FY 2022 of ₹882 million (S$15.8 million) arose mainly from the settlement of SGD-denominated loans, but partially offset by loss from the settlement of foreign exchange forward contracts entered into hedge income repatriated from India to Singapore.

Realised exchange loss for 1H FY 2022 of ₹1.4 billion (S$24.6 million) arose mainly from settlement of SGD-denominated loans. Realised exchange gain or loss is recognised when borrowings that are denominated in currencies other than the INR are settled.

As a result, ordinary profit before tax was ₹3.3 billion in 1H FY 2022, a decrease of 7% as compared to ₹3.6 billion in 1H FY 2021. In SGD terms, ordinary profit before tax decreased by 9% to S$59.9 million.

Income tax expenses increased by ₹116 million (11%) to at ₹1.2 billion (S$21.0 million) mainly due to higher deferred tax liabilities arising from acquisition of Arshiya Warehouse 7 and Industrial Facility in Mahindra World City.

Distribution adjustments:

  • Current income tax expenses of ₹841 million (S$15.1 million).
  • Trustee-manager fees of ₹250 million (S$4.5 million) to be paid in units. The Trustee-manager has elected to receive 50% of its base fee and performance fee in units and 50% in cash; hence 50% of the fees are added back to the income available for distribution.
  • Realised exchange loss of ₹446 million (S$8.0 million) was added back for distribution purpose as it pertains to refinancing of SGD-denominated loans that have not been hedged into INR. Exchange gain/loss is recognised when borrowings that are denominated in currencies other than the INR are revalued.
  • Income due to non-controlling interests of ₹145 million (S$2.6 million) is deducted from income available for distribution.

Income available for distribution for 1H FY 2022 increased by 4% to ₹3.1 billion compared to ₹3.0 billion, mainly due to higher NPI, while partially offset by higher finance cost and lower interest income resulting from acquisition of Building Q1, Arshiya Warehouse 7 and Industrial Facility in Mahindra World City. In SGD terms, income available for distribution increased by 3% to S$55.1 million.

Income available for distribution per unit for 1H FY 2022 was ₹2.66 or 4.76 S₵. DPU was ₹2.39 or 4.28 S₵ after retaining 10% of income available for distribution, representing an increase of 4% and 2% in INR terms and SGD terms respectively when compared to ₹2.31 or 4.20 S₵.

1H FY 2022 vs 2H FY 2021

Total property income for 1H FY 2022 increased by 7% to ₹5.8 billion (S$103.3 million) mainly due to the additional income contribution from Building Q1 which was acquired in November 2021; income contribution from Arshiya Warehouse 7 and Industrial Facility in Mahindra World City which were acquired in March 2022 and May 2022 respectively; together with the higher utilities and carpark income in 1H FY 2022.

Total property expenses for 1H FY 2022 increased by 7% to ₹1.1 billion (S$19.9 million) mainly due to higher property taxes and property management fees during the period.

As a result, net property income for 1H FY 2022 increased by 7% at ₹4.6 billion. In SGD terms, net property income increased by 6% to S$83.4 million.

Income available for distribution per unit for 1H FY 2022 increased by 21% to ₹3.1 billion, mainly due current period’s increased NPI and higher current tax resulting from withholding tax on dividend in 2H FY 2021, while partially offset by higher net finance costs. In SGD terms, income available for distribution increased by 19% to S$55.1 million.

Income available for distribution per unit for 1H FY 2022 was ₹2.66 or 4.76 S₵. DPU was ₹2.39 or 4.28 S₵, after retaining 10% of income available for distribution. This represents an increase of 20% and 19% in INR and SGD terms respectively when compared to 2H FY 2021.

 

Commentary

We have seen continuous improvement in park attendance from December 2021 to June 2022 and we anticipate more tenants returning to office in the coming months.

Based on the market research report by CBRE South Asia Pvt Ltd (“CBRE”) for the period ended 30 June 2022, some of the key highlights (compared to period ended 31 December 2021) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy decreased to 15.4%, from 18.3% as of 31 December 2021, due to sustained demand against negligible supply addition. Average rents increased by 2% quarter-on-quarter in non-SEZ sectors, while it remained stable in SEZ sectors. CBRE expects rents to increase in the coming quarters.

Chennai

  • In Old Mahabalipuram Road (the micro-market where ITPC is located), vacancy decreased to 11.3%, from 14.5% as of 31 December 2021, due to significant leasing activities and limited new supply. Rental values remained stable in non-SEZ sectors. CBRE expects rental values to continue increasing in the coming quarters.
  • In Grand Southern Trunk (the micro-market where CyberVale is located), vacancy increased to 37.6%, from 28.9% as of 31 December 2021, due to significant supply addition. Rents remained stable. CBRE expects rental values to remain stable in the coming quarters.

Hyderabad

  • In IT Corridor (the micro-market where ITPH, CyberPearl and aVance Hyderabad are located), vacancy increased to 11.6%, from 9.4% as of 31 December 2021, mainly due to increase in supply. Rents remained stable over the same period. CBRE expects rents in IT Corridor I to remain stable in the coming quarters.

Pune

  • In Hinjawadi (the micro-market where aVance Pune is located), vacancy decreased to 26.2%, from 27.1% as of 31 December 2021, due to significant leasing activity and limited new supply. Rents increased by 2% across the SEZ sector. CBRE expects rents in Hinjawadi to remain stable over the coming quarters.

Mumbai

  • In Navi Mumbai (the micro-market where Building Q1 is located), vacancy decreased to 34.6%, from 37.6% as of 31 December 2021, due to significant leasing activity amid negligible supply addition. Rents remained stable across SEZ sectors. CBRE expects rents to remain stable in the coming quarters.

The performance of a-iTrust is influenced by its tenants’ business performance and outlook, condition of each city’s real estate market and global economic conditions. a-iTrust will continue to focus on enhancing the competitiveness of its properties to distinguish itself from competitors, while maintaining financial discipline, and seeking growth opportunities.

Notes