GLP

GLP: Reported 4QFY14 results which were at the higher end of estimates, as 4QFY14 core pro forma net profit came in at US$54m (+31%) taking FY14 core pro forma net profit to US$250m (+17%). Accounting for revaluation gains, FY14 pro forma net profit would have been US$685m (+31%). Pro-forma figures were adjusted for the sale of assets to J-REIT and FX-related effects to enable a like-for-like comparable base. Revenue for the quarter was up 20% to US$150m, mainly attributable to the completion and stabilization of development projects in China with increasing rents, increase in asset, development and property management fee income from GLP J-REIT and joint ventures in China and Japan, partially offset by the sale of properties in Japan to GLP J-REIT. Bottom-line was however weighed by a 64.7% drop in contributions from jointly-controlled entities to US$46.7m and finance costs of US$29m (FY13: Finance income of US$12.2m), partially offset by a 29.8% rise in fair value gains of US$92.4m recognized during the quarter. Operationally for the full year, China remains the key driver of GLP’s growth, with earnings up 42% y/y, due to the completion and stabilization of the group’s development projects, increasing leasable area of properties owned, increasing rents, and contributions from newly acquired subsidiaries. Japan meanwhile saw revenue sliding 40.3% mainly due to the sale of properties in Japan to GLP J-REIT in 4QFY13 and the weakening of Japanese Yen against the USD, partially offset by asset management and development fee income and dividend income from GLP J-REIT. Over in Brazil, revenue surged 233.5% from a low base, mainly due to the increase in development management fee from jointly-controlled entities. The group however recorded operating losses of US$18.5m, mainly due to the share of fair value loss of investment properties of jointly-controlled entities, arising from the reassessment of certain property values. Going forward, GLP remains positive on its prospects, noting that China, Japan and Brazil have attractive supply and demand dynamics for logistics facilities in the medium and long-term, and expects its market leading positions, strong management team and solid balance sheet to position itself well for continued growth. As at end Mar ’14, GLP’s net asset value stood at US$1.84 which translates to 1.2x P/B. The group is recommending a dividend of 4.5¢ per share, up from 13% versus the previous year.