CMT

CMT: 3QFY15 core results largely in line, with DPU up 9.6% y/y to 2.98¢ on distributable income of $103.2m (+10.2%). The strong bottom-line was largely aided by the release of $8.0m of taxable income retained in 1Q15.

Gross revenue and NPI fell 1.8% and 0.7% to $161.7m and $113.3m respectively, due to on-going asset enhancement works in IMM Building, and lower occupancy at JCube and Clarke Quay, but mitigated by lower property operating expenses. Overall portfolio occupancy remained high at 96.8%, with WALE of 2.8 years.

For 9M15, CMT guided that tenants’ sales increased 4.4% and shopper traffic grew 4.2% y/y.

Thanks to its proactive capital management, CMT's bottom line distribution was aided by lower finance costs (-16.8%) after it refinanced its US$500m 4.321% fixed rate note at a lower interest rate through the issuances of 3 tranches of fixed rate notes.

On a q/q basis, aggregate leverage and average debt cost both held steady at 33.7% and 3.3% respectively, while average debt tenor declined to 5.8 years from 6.1 years.

Going forward, CMT remains confident of its prospects, citing its strong portfolio of quality shopping malls which are mostly well-connected to public transportation hubs and are strategically located. This, coupled with the large and diversified tenant base of the portfolio, will contribute to the stability and sustainability of the malls’ occupancy rates and rental revenues.

At the current price, CMT trades at 5.9% annualized yield and 1.1x P/B.