Financial Statements And Related Announcement :: Full Yearly Results

FIRST REAL ESTATE INVESTMENT TRUST

2020 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & FOURTH QUARTER DISTRIBUTION ANNOUNCEMENT

First Real Estate Investment Trust ("First REIT") is a real estate investment trust constituted by the Trust Deed entered into on 19 October 2006 between First REIT Management Limited (formerly known as Bowsprit Capital Corporation Limited) as the Manager and HSBC Institutional Trust Services (Singapore) Limited as the Trustee. First REIT was listed on the Singapore Exchange Securities Trading Limited on 11 December 2006. On 1 March 2018, HSBC Institutional Trust Services (Singapore) Limited retired as the Trustee of First REIT in favour of Perpetual (Asia) Limited.

First REIT is Singapore's first healthcare real estate investment trust that aims to invest in a diversified portfolio of income-producing real estate and / or real estate-related assets in Asia that are primarily used for healthcare and / or healthcare-related purposes.

Managed by First REIT Management Limited (formerly known as Bowsprit Capital Corporation Limited), First REIT's portfolio consists of twenty properties located in Indonesia, Singapore and South Korea, namely 1) Siloam Hospitals Lippo Village, 2) Siloam Hospitals Kebon Jeruk, 3) Siloam Hospitals Surabaya, 4) Imperial Aryaduta Hotel & Country Club, 5) Mochtar Riady Comprehensive Cancer Centre, 6) Siloam Hospitals Lippo Cikarang, 7) Siloam Hospitals Manado

• Hotel Aryaduta Manado, 8) Siloam Hospitals Makassar, 9) Siloam Hospitals Bali, 10) Siloam Hospitals TB Simatupang, 11) Siloam Hospitals Purwakarta, 12) Siloam Sriwijaya, 13) Siloam Hospitals Kupang & Lippo Plaza Kupang, 14) Siloam Hospitals Labuan Bajo, 15) Siloam Hospitals Buton and Lippo Plaza Buton, 16) Siloam Hospitals Yogyakarta, 17) Pacific Healthcare Nursing Home @ Bukit Merah, 18) Pacific Healthcare Nursing Home II @ Bukit Panjang, 19) The Lentor Residence and 20) Sarang Hospital.

Its hospital assets in Indonesia are operated by PT Siloam International Hospitals Tbk, a subsidiary of PT Lippo Karawaci Tbk, a strong brand name in the Indonesian healthcare industry supported by a team of international healthcare professionals whereas The Imperial Aryaduta Hotel & Country Club and Hotel Aryaduta Manado are operated by The Aryaduta Hotel and Resort Group. The Lippo Plaza Kupang and Lippo Plaza Buton are managed by PT Lippo Malls Indonesia. In Singapore, the nursing homes at Bukit Merah and Bukit Panjang are operated by Pacific Healthcare Nursing Home Pte. Ltd. and Pacific Eldercare and Nursing Pte. Ltd., respectively. The Lentor Residence is operated by The Lentor Residence Pte. Ltd. In South Korea, the Sarang Hospital is operated by a private doctor.

Through First REIT, investors can participate in an asset class that has a focus towards Asia's growing healthcare sector, which is boosted by an increase in life expectancy in Indonesia and the rest of Southeast Asia.

FIRST REAL ESTATE INVESTMENT TRUST

2020 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & FOURTH QUARTER DISTRIBUTION ANNOUNCEMENT

Summary of First REIT's Results
				Group
	Note	2H 2020	2H 2019	Change	FY 2020	FY 2019	Change
		S$'000	S$'000	%	S$'000	S$'000	%
Rental and Other Income	1	41,021	57,661	(28.9%)	79,619	115,297	(30.9%)
Net Property and Other Income	1	39,937	56,528	(29.4%)	77,465	112,894	(31.4%)
Distributable Amount	2	14,993	34,296	(56.3%)	33,413	68,463	(51.2%)
Distribution per unit (cts)	3	1.85	4.30	(57.0%)	4.15	8.60	(51.7%)

Note:

1. Rental and other income for 2H 2020 decreased by 28.9% to S$41.0 million, and net property and other income for 2H 2020 decreased by 29.4% to S$39.9 million as compared to 2H 2019 mainly due to the additional two- month rental relief for September and October 2020 extended to Indonesia tenants.
2. The distribution amount to Unitholders included the 3Q 2020 distribution of S$8.2 million which was paid on 23 December 2020. The 4Q 2020 distribution amount to Unitholders is S$6.8 million.
3. Distribution per unit ("DPU") included 3Q 2020 DPU of 1.01 cents which paid on 23 December 2020. The 4Q 2020 DPU is 0.84 cents.

Distribution Details

Distribution	1 October 2020 to 31 December 2020
Distribution type	(a) Taxable income
	(b) Capital distribution
Distribution rate	Total : 0.84 cents per unit
	(a) Taxable income distribution - 0.10 cents per unit
	(b) Capital distribution - 0.74 cents per unit
Book closure date	27	January 2021 at 5.00 pm
Ex-dividend date	26	January 2021 at 9.00 am
Payment date	24	March 2021

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FIRST REAL ESTATE INVESTMENT TRUST

2020 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & FOURTH QUARTER DISTRIBUTION ANNOUNCEMENT

1(a)(i) Statement of Total Return

				Group
	Note	2H 2020	2H 2019	Change	FY 2020	FY 2019	Change
		S$'000	S$'000	%	S$'000	S$'000	%
Rental and other income	1	41,021	57,661	(28.9%)	79,619	115,297	(30.9%)
Property operating expenses	2	(1,084)	(1,133)	(4.3%)	(2,154)	(2,403)	(10.4%)
Net property and other income		39,937	56,528	(29.4%)	77,465	112,894	(31.4%)
Interest income		-	1,508	(100.0%)	1,436	2,364	(39.3%)
Manager's management fees	3	(4,682)	(5,734)	(18.3%)	(9,410)	(11,401)	(17.5%)
Trustee fees	4	(203)	(217)	(6.5%)	(416)	(430)	(3.3%)
Finance costs	5	(7,911)	(10,313)	(23.3%)	(17,826)	(20,390)	(12.6%)
Other expenses	6	(4,179)	(475)	NM	(5,703)	(1,002)	NM
Net income before the
undernoted		22,962	41,297	(44.4%)	45,546	82,035	(44.5%)
Net fair value losses on
investment properties	7	(401,387)	(5,607)	NM	(401,387)	(5,607)	NM
Net fair value gains/(losses) of
derivative financial instruments	8	1,255	(499)	NM	(2,391)	(1,040)	NM
Total return for the period/year
before income tax		(377,170)	35,191	NM	(358,232)	75,388	NM
Income tax benefit/(expense)	9	12,265	(17,149)	NM	5,822	(26,472)	NM
Total return for the period/year
after income tax		(364,905)	18,042	NM	(352,410)	48,916	NM
Other comprehensive return:
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on
translating foreign operations,
net of tax		(526)	(24)	NM	(164)	(133)	23.3%
Total comprehensive (loss)/
income for the year		(365,431)	18,018	NM	(352,574)	48,783	NM
Total return for the year after
income tax attributable:
Unitholders		(366,623)	16,324	NM	(355,827)	45,508	NM
Perpetual securities holders		1,718	1,718	-	3,417	3,408	0.3%
		(364,905)	18,042	NM	(352,410)	48,916	NM
Note:

NM - Not meaningful

1. Rental and other income for 2H 2020 decreased by 28.9% to S$41.0 million compared to 2H 2019 mainly due to additional two-month rental relief for September and October 2020 extended to Indonesia tenants to alleviate the economic distress caused by the COVID-19 pandemic.
2. Property operating expenses for 2H 2020 decreased by 4.3% to S$1.1 million compared to 2H 2019 mainly due to lower property expenses for Indonesia properties.
3. Manager's management fees for 2H 2020 decreased by 18.3% to S$4.7 million compared to 2H 2019 mainly due to lower net property income and total assets.
4. Trustee fees for 2H 2020 decreased by 6.5% to S$0.2 million compared to 2H 2019 mainly due to lower total assets.

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FIRST REAL ESTATE INVESTMENT TRUST

2020 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & FOURTH QUARTER DISTRIBUTION ANNOUNCEMENT

1. Finance costs for 2H 2020 decreased to S$7.9 million compared to 2H 2019 mainly due to lower interest rates.
2. Other expenses for 2H 2020 increased to S$4.2 million compared to 2H 2019 mainly due to project expenses incurred.
3. Net fair value losses on investment properties increased to S$401.4 million compared to 2H 2019 mainly due to the valuation of certain Indonesia properties have taken into consideration the terms arising from (a) the Memorandum of Understanding entered into between Perpetual (Asia) Limited (as trustee of First REIT) and PT. Lippo Karawaci Tbk dated 28 November 2020 as announced in First REIT's announcement on 29 November 2020 titled "Restructuring of Master Leases" (the "Restructuring Announcement"); (b) the Memorandum of Understanding entered into between the Trustee and PT. Metropolis Propertindo Utama dated 28 November 2020 as announced in the Restructuring Announcement; and (c) existing occupation arrangements of the properties not affected by (a) or (b) .
4. Net change in fair value of derivative financial instruments for 2H 2020 relates to the revaluation gains on the interest rate swap contracts.
5. Income tax benefit for 2H 2020 of S$12.3 million compared to income tax expense for 2H 2019 mainly due to write back of provision for deferred taxation on net fair value losses on investment properties.

1(a)(ii) Statement of Distribution

				Group
	Note	2H 2020	2H 2019	Change		FY 2020	FY 2019	Change
		S$'000	S$'000	%		S$'000	S$'000	%
Total return for the period/year
after income tax		(364,905)	18,042	NM		(352,410)	48,916	NM
Adjustments for tax purposes:
- Manager's management fees		2,334	4,887	52.2%		4,679	9,747	(52.0%)
payable in units
- Foreign exchange gains		(986)	(81)	NM		(325)	(245)	32.7%
- Change in fair value on
investment properties, net of	1	383,118	13,361	NM		383,118	13,361	NM
deferred tax
- Net fair value (gains)/ losses of
derivative financial instruments		(1,255)	499	NM		2,391	1,040	NM
- Amount reserved for distribution
to perpetual securities holders	2	(1,718)	(1,718)	-		(3,417)	(3,408)	0.3%
- Others		(1,595)	(694)	NM		(623)	(948)	(34.3%)
Total available for distribution
to Unitholders	3	14,993	34,296	(56.3%)		33,413	68,463	(51.2%)
Unitholders' distribution:
- as distribution from operations		2,898	19,738	(85.3%)		11,795	39,544	(70.2%)
- as distribution of Unitholders'
capital contribution		12,095	14,558	(16.9%)		21,618	28,919	(25.2%)
Distributable amount to
Unitholders		14,993	34,296	(56.3%)		33,413	68,463	(51.2%)

Note:

NM - Not meaningful

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