CapitaLand Ascendas REIT – Financial Analysis (1H FY2025)

Financial Metrics Highlighted in the Reports

• Gross Revenue: S\$754.8m (1H FY2025), S\$770.1m (1H FY2024), S\$752.9m (2H FY2024)
• Net Property Income (NPI): S\$523.4m (1H FY2025), S\$528.4m (1H FY2024), S\$521.5m (2H FY2024)
• Total Amount Available for Distribution: S\$331.1m (1H FY2025), S\$330.8m (1H FY2024), S\$338.0m (2H FY2024)
• Distribution Per Unit (DPU): 7.477 cents (1H FY2025), 7.524 cents (1H FY2024), 7.681 cents (2H FY2024)
• Earnings Per Unit (EPU): 6.74 cents (1H FY2025), 7.95 cents (1H FY2024), 9.23 cents (2H FY2024)
• Aggregate Leverage: 37.4% (30/6/2025), 37.7% (31/12/2024)
• Interest Coverage Ratio (ICR): 3.7x (30/6/2025), 3.6x (31/12/2024)
• Net Asset Value per Unit: S\$2.19 (30/6/2025), S\$2.27 (31/12/2024)
• Units in Issue: 4,606.3m (1H FY2025), 4,397.0m (1H FY2024)
• Cash and Equivalents: S\$180.9m (30/6/2025), S\$167.7m (31/12/2024)
• Portfolio Size: 229 properties (30/6/2025 and 30/6/2024)

Year-on-Year and Quarter-on-Quarter Comparison

Year-on-Year (1H FY2025 vs 1H FY2024):

• Gross revenue decreased by 2.0% (S\$754.8m vs S\$770.1m)
• NPI decreased by 0.9% (S\$523.4m vs S\$528.4m)
• DPU decreased by 0.6% (7.477 vs 7.524 cents)
• EPU decreased by 15.3% (6.74 vs 7.95 cents)
• Total return for the period decreased by 14.4% (S\$302.7m vs S\$353.7m)
• Net finance costs decreased due to hedge accounting and lower all-in group interest rate (3.66% vs 3.74%)
• Foreign exchange losses were lower (S\$11.6m loss in 1H25 vs S\$44.9m loss in 1H24)

Quarter-on-Quarter (1H FY2025 vs 2H FY2024):

• Gross revenue increased slightly by 0.2%
• NPI increased by 0.4%
• DPU decreased by 2.7% (7.477 vs 7.681 cents)
• EPU decreased by 27% (6.74 vs 9.23 cents)
• Total return for the period decreased by 26.2% (S\$302.7m vs S\$410.4m)

Historical Performance

• Gross revenue and NPI have generally trended lower compared to the previous year and previous half-year, due to property divestments and weaker AUD/USD.
• DPU has been relatively stable, with minor decreases year-on-year and quarter-on-quarter.
• Net profit and EPU saw significant drops compared to 2H FY2024, mainly due to higher deferred tax expenses and lower fair value gains.

Asset Revaluation or Delay

• There was no external revaluation performed for 1H FY2025; interim values were reviewed internally, considering market data, operating performance, and capital expenditure. External independent valuations were conducted as of 31 December 2024 [[33]], [[39]], [[46]].

Exceptional Earnings and Expenses

• Gain on disposal of investment property: S\$7.7m in 1H FY2025 (US business space property); 1H FY2024 gain was S\$0.6m (Australia divestments) [[5]], [[44]].
• Significant deferred tax expense: S\$11.0m in 1H FY2025 due to reversal of deferred tax assets; in 1H FY2024, there was a deferred tax credit of S\$13.8m [[6]], [[45]].
• Net change in fair value of financial derivatives: S\$8.2m loss in 1H FY2025 (vs S\$56.3m gain in 1H FY2024) [[5]].

Early or Delayed Profit/Loss Recognition

• No explicit mention of early or delayed profit/loss recognition. However, the gain/loss on investment property disposal and deferred tax adjustments reflect one-off or timing-related items [[5]], [[45]].

Directors’ Pay

• Management fees paid to the Manager: S\$42.8m in 1H FY2025 (S\$43.0m in 1H FY2024). 20% of base management fees paid in Units, rest in cash [[4]], [[44]].
• Trustee fees: S\$1.4m in 1H FY2025 [[44]].

New Shares Issuance or Placement

• Private placement in June 2025: S\$500m gross proceeds, 202.4m new units issued [[10]], [[43]], [[62]].
• Management fee and divestment fee paid in Units: S\$8.6m and S\$0.6m respectively [[36]].

Potential Divestment, Listing, or Major Fundraising

• No explicit mention of upcoming divestment or listing that may result in more funds. However, proceeds from the recent private placement are intended for acquisitions and debt repayment [[62]].

Macroeconomic and Other Major Events

• Macroeconomic conditions: The report discusses global risks, inflation, trade tensions, and monetary policy uncertainties in Singapore, the US, Australia, and Europe. These could impact rental growth, occupancy, and valuation [[56]], [[57]].
• No mention of natural disasters, disputes, court cases, or government policy changes directly impacting CLAR in the period under review.

Share Dilution, Buybacks, or Mandates

• Share dilution: Issuance of 202.4m new units in June 2025 for private placement (dilutive event). No mention of share buybacks or mandates for such [[43]], [[62]].

Related Party Transactions & Unusual Fund Flows

• Related party transactions are listed (management fees, property service fees, trustee fees, etc.) and appear consistent with prior periods [[44]]. No unusual or questionable flows detected.

Sudden Jumps in Financials and Reasons

• EPU dropped 27% QoQ (6.74c vs 9.23c), and total return dropped 26.2% (S\$302.7m vs S\$410.4m), due mainly to higher tax expense and lower fair value gains in 1H FY2025 [[54]].
• Otherwise, revenue and NPI remained relatively stable, with no sudden surges.

Dividend Proposed and Trend

• DPU for 1H FY2025: 7.477 cents (down 0.6% YoY and 2.7% QoQ) [[1]], [[54]].
• Distribution breakdown: 0.998 cents for 6 June to 30 June 2025; 6.479 cents for 1 Jan to 5 June 2025 [[1], [58], [59]].

Other Proposed Corporate Actions

• No mention of other corporate actions apart from the private placement and proposed acquisitions using proceeds [[62]].

Events and Developments Impacting Outlook

• Potential acquisitions: Proceeds from the private placement are earmarked for the acquisition of 9 Tai Seng Drive and 5 Science Park Drive [[62]].
• Macroeconomic factors: Inflation, monetary policy, and global economic risks could affect occupancy, rental rates, and asset values [[56]], [[57]].
• Redevelopment plans: UK data centre redevelopment and ongoing asset enhancement initiatives (AEIs) [[57]].

Insights and Conclusion

• Overall Assessment: The results are broadly stable, with minor declines in revenue, NPI, and DPU, mainly due to property divestments and currency effects. The portfolio remains diversified and resilient, but faces macroeconomic headwinds and lower fair value gains.
• Strengths: Prudent capital management, high fixed-rate borrowings, strong balance sheet, and a long weighted average lease expiry (WALE).
• Risks: Global economic uncertainties, FX volatility, and potential impact on rental growth and valuations.
• Outlook: Cautious, with potential for growth via acquisitions (funded by recent placement), but headwinds from market volatility and inflation persist.
• Investor Focus: DPU is stable but trending down; watch for the impact of planned acquisitions, macroeconomic developments, and currency movements.

Chairman’s Statement

Full Extract: Not provided in the report. If the statement is in a different file or section, it was not included in the provided text.

Key Points for Investors

• Stable but slightly declining operational metrics (revenue, NPI, DPU).
• Ongoing portfolio optimisation, with new acquisitions planned and funded.
• Macroeconomic and FX headwinds remain a risk.
• Recent share dilution from private placement.
• No material litigation, regulatory, or natural disaster risks disclosed.
• No unusual related party transactions or questionable fund flows detected.

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