On 21 January 2025, Mapletree Logistics Trust (“MLT”) have announced their third quarter result for FY2025. The fundamentals remained relatively unchanged, though assuming no change in the current trend, the total dividend payout for the calendar year 2025 will likely be lower than the previous calendar year. MLT has also seen a decrease in share price from the previous article and is now back to trading at a discount from its book value. Investors will need to assess if this is sufficient buffer for their risk appetite.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Third Quarter Results
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | -1.2% | -9.8% |
| Rating | Unfavorable | Unfavorable |
With effect from February 2025, I will be using the quarter-on-quarter DPU changes as references for REITs that share their quarterly DPU changes. This is due to REITs are usually not as affected by seasonal changes.
DPU for the third quarter of FY2025 decreased by 1.2% to SGD0.0200 per unit from SGD0.0203 per unit for the previous quarter. This was mainly in line with the decrease in net property income. Revenue has decreased due to contribution from divested properties and currency weakness, and there was an increase in property expenses due to higher property related taxes and marketing expenses. This metric remains Unfavorable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 96.3% | 96.0% |
| Rating | Favorable | Favorable |
Occupancy rate as of 31 December 2024 increased slightly to 96.3%. This metric remains Favorable as it is above my expected healthy occupancy rate of 95%. MLT have been able to fully utilize their assets.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 40.3% | 40.2% |
| Rating | Unfavorable | Unfavorable |
Gearing ratio has remained relatively unchanged at 40.3% as of 31 December 2024. The metric remains Unfavorable.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 2.9x | 3.0x |
| Rating | Neutral | Favorable |
The adjusted interest coverage decreased to 2.9 times as of 31 December 2024. The metric has shifted towards Neutral as it is slightly below my preference of 3.0 times.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.5 years | 3.6 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt remained relatively unchanged at 3.5 years as of 31 December 2024. This metric remains Favorable as it allows them sufficient time to refinance their debts when they fall due. Do note that 32% of their debt due to mature in the next 2 financial years.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.90 | 1.01 |
| Rating | Favorable | Neutral |
The Price to Book (“P/B”) ratio decreased to 0.90. This is computed using the closing share price of SGD1.21 on 21 February 2025 and the net asset value per share of SGD1.34 as of 31 December 2024. The metric has shifted towards Favorable as we are paying a discount from its book value.
As of 21 February 2025, the Market Capitalization is approximately SGD6,131 million.
Website: Yahoo Finance: Mapletree Logistics Trust (M44U.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 1.66% | SGD 0.020 |
| 2024 | 7.07% | SGD 0.086 |
| 2023 | 7.47% | SGD 0.090 |
| 2022 | 6.20% | SGD 0.075 |
| 2021 | 7.76% | SGD 0.094 |
| 2020 | 6.72% | SGD 0.081 |
With a dividend payout for SGD0.020 per unit in the first quarter of the calendar year 2025, this is lower than the payout in the calendar year 2024. As a conservative estimate, when annualized this will amount to SGD0.080 per unit for the calendar year 2025.
Using the closing share price of SGD1.21 as of 21 February 2025, this translates to a dividend yield of 6.61%. For my benchmark, a general reasonable yield would be around 5.25%. MLT’s dividend yield is above my benchmark and is Favorable.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
In the event that the required dividend yield increases to 7.25% as a benchmark, based on the dividend of SGD0.080 MLT may see its share price drop by 8.8% to SGD1.10.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 1.21 | – |
| 7.25% | 1.10 | -8.8% |
| 8.25% | 0.97 | -19.9% |
Interest Rate Sensitivity
The Federal Reserve on 30 January 2025 have kept interest rates unchanged at a range of 4.25% to 4.50%. This is due to significant uncertainty in the U.S. economic landscape, with a healthy set of macroeconomic fundamentals that have changed little in recent months, but coming decisions from the Trump administration on immigration, tariffs, taxes and other areas that could prove disruptive.
Website: Fed leaves rates unchanged, sees no hurry to cut again
MLT have provided the interest rate sensitivity analysis as below. With a distributed income of SGD107 million for the third quarter of FY2025, should the interest rate change by 1.0%, distribution is expected to change by 1.2%.
| Change in Interest Rates | Impact on amount available for distribution per quarter (SGD’000) | Impact on DPU (%) |
|---|---|---|
| 50 bps | $1,200 | 1.2% |
| 100 bps | $2,400 | 2.4% |
Other metrics
Tenant profile
MLT has an enlarged portfolio covering multiple trade sectors. The high quality and diverse tenant base provide resilience to the MLT portfolio across challenging events. The top 10 tenants accounted for only 21.1% of MLT’s portfolio with no single tenant accounting for more than 3.7% during the period, providing income diversity to the portfolio.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | -1.2% | Unfavorable |
| Occupancy | 96.3% | Favorable |
| Gearing Ratio | 40.3% | Unfavorable |
| Interest Coverage | 2.9x | Neutral |
| Debt Maturity Profile | 3.5 years | Favorable |
| Price to Book Ratio | 0.90 | Favorable |
| Overall | Neutral |
The overall metrics has remained Neutral. The Price to Book ratio has become Favorable, indicating that it is trading at a discount and that investors are factoring that there may be additional risk. This can be seen by the decrease interest coverage as well as a lower expected dividend yield for the calendar year 2025.
Background
MLT is Singapore’s first Asia-focused logistics real estate investment trust. Listed on the Singapore Exchange Securities Trading Limited in 2005, MLT invests in a diversified portfolio of quality, well-located, income producing logistics real estate in Singapore, Hong Kong SAR, Japan, China, Australia, South Korea, Malaysia, Vietnam and India.
The Manager, Mapletree Logistics Trust Management Ltd., is committed to providing Unitholders with competitive total returns through the following strategies:
- optimising organic growth and hence, property yield from the existing portfolio;
- making yield accretive acquisitions of good quality logistics properties; and
- managing capital to maintain MLT’s strong balance sheet and provide financial flexibility for growth.
Previous Post
Website: Mapletree Logistics Trust (SGX: M44U): 2025 Half Year Result
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