Financial Statements And Related Announcement :: Full Yearly Results

FIRST REAL ESTATE INVESTMENT TRUST

2018 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & 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 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 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

2018 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & DISTRIBUTION ANNOUNCEMENT

Summary of First REIT's Results

Gross Revenue

Net Property Income

Distributable Amount

Distribution per unit (cts)

Annualised Distribution per unit (cts)

Group
Quarter			Full Year
4Q 2018	4Q 2017	Change	31 Dec 2018	31 Dec 2017	Change
S$'000	S$'000	%	S$'000	S$'000	%
29,321 28,530 17,014 2.15 8.60	28,551 27,990 16,777 2.15 8.571	2.7% 1.9% 1.4% - 0.4%	116,198 114,391 67,681 8.60 8.60	110,993 109,476 66,727 8.571 8.571	4.7% 4.5% 1.4% 0.4% 0.4%

Note:

1)

Actual distribution paid for FY 2017.

Distribution Details

Distribution	1 October 2018 to 31 December 2018
Distribution type	(a) Taxable income (b) Tax-exempt income (c) Capital distribution
Distribution rate	Total : 2.15 cents per unit (a) Taxable income distribution - 0.07 cents per unit (b) Tax-exempt income distribution - 1.12 cents per unit (c) Capital distribution - 0.96 cents per unit
Book closure date	24 January 2019 at 5.00 pm
Ex-dividend date	23 January 2019 at 9.00 am
Payment date	28 February 2019

Distribution Reinvestment Plan ("DRP")

The DRP will not be applicable for this quarter. All Unitholders will be receiving 4Q 2018 DPU of Singapore 2.15 cents in cash, payable on 28 February 2019. The Manager may consider applying the DRP at a later date and Unitholders will be notified accordingly.

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FIRST REAL ESTATE INVESTMENT TRUST

2018 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & DISTRIBUTION ANNOUNCEMENT

1(a)(i)Statement of Comprehensive Income

Gross revenue

Property operating expenses Net property income Interest income

Manager's management fees

Trustee fees

Finance costs

2

Other expenses

Net income before the undernoted

Net fair value (losses)/gains on investment properties

Net change in fair value of derivative financial instruments

Total return for the period/year before income tax

Income tax benefit/(expense)

Total return for the period/year after income tax

Other comprehensive income: Exchange differences on translating foreign operations, net of tax

Total comprehensive income for the period/year

Total return for the period after income tax attributable:

Unitholders 2

Perpetual securities holders 2

Group
Quarter			Full Year
Note	4Q 2018	4Q 2017	Change	31 Dec 2018	31 Dec 2017	Change
1 2 3 4 5 6	S$'000	S$'000	%	S$'000	S$'000	%
	29,321 (791)	28,551 (561)	2.7% 41.0%	116,198 (1,807)	110,993 (1,517)	4.7% 19.1%
	28,530 433 (2,875) (108) (5,906) (155)	27,990 437 (2,794) (104) (4,875) (1,012)	1.9% (0.9%) 2.9% 3.8% 21.1% (84.7%)	114,391 1,690 (11,435) (427) (21,614) (2,298)	109,476 1,429 (10,877) (405) (17,818) (1,056)	4.5% 18.3% 5.1% 5.4% 21.3% 117.6%
	19,919 (5,358) (437)	19,642 13,367 80	1.4% NM NM	80,307 (5,358) (174)	80,749 13,367 (558)	(0.5%) NM (68.8%)
	14,124 15,010	33,089 (6,874)	(57.3%) NM	74,775 1,100	93,558 (20,120)	(20.1%) NM
	29,134	26,215	11.1%	75,875	73,438	3.3%
	301	84	258.3%	370	(649)	NM
	29,435	26,299	11.9%	76,245	72,789	4.7%
	28,275 859	25,356 859	11.5% -	72,467 3,408	70,030 3,408	3.5% -
	29,134	26,215	11.1%	75,875	73,438	3.3%

Note:

NM - Not meaningful

The results for 4Q 2018 includes the full quarter contribution from Siloam Hospitals Yogyakarta ("SHYG") which was acquired in 4Q 2017.

1)Property operating expenses for 4Q 2018 increased by 41.0% to S$791,000 compared to 4Q 2017 mainly due to higher expenses incurred for Sarang Hospital and Indonesia properties.

• 2) Finance costs for 4Q 2018 increased to S$5.9 million compared to 4Q 2017 mainly due to higher interest costs on loans and full quarter interest expenses for loan drawn down to finance the acquisition of SHYG in 4Q 2017.

• 3) Other expenses for 4Q 2018 decreased to S$155,000 compared to 4Q 2017 mainly due to the absence of costs related to Medium Term Note ("MTN") exercise and change of trustee incurred in Q4 2017.

• 4) Net fair value losses on investment properties for 4Q 2018 of S$5.4 million compared to net fair value gains on investment properties for 4Q 2017 was mainly due to losses on revaluation of investment properties.

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FIRST REAL ESTATE INVESTMENT TRUST

2018 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & DISTRIBUTION ANNOUNCEMENT

• 5) Net change in fair value of derivative financial instruments for 4Q 2018 relates to the revaluation losses on the interest rate swap contracts.

• 6) Income tax benefit for 4Q 2018 of S$15.0 million compared to income tax expense for 4Q 2017 mainly due to write back of provision for deferred taxation on fair value loss on investment properties resulting from a reduction in tax rates, partly offset by higher current tax expenses.

1(a)(ii) Statement of Distribution

Total return for the period/year after income tax

Adjustments for tax purposes:

• - Manager's management fees payable in units

• - Foreign exchange (gains)/losses

• - Net fair value (gains)/losses on investment properties, net of deferred tax

• - Net change in fair value of derivative financial instruments

• - Costs related to MTN exercise

• - Amount reserved for distribution to perpetual securities holders

• - Others

Total available for distribution to Unitholders

Unitholders' distribution:

- as distribution from operations - as distribution of Unitholders'

capital contribution Distributable amount to Unitholders

Group
Quarter			Full Year
Note	4Q 2018	4Q 2017	Change	31 Dec 2018	31 Dec 2017	Change
1 2	S$'000	S$'000	%	S$'000	S$'000	%
	29,134 2,018 (40) (14,343) 437 - (859) 667	26,215 2,239 (286) (11,062) (80) 698 (859) (88)	11.1% (9.9%) (86.0%) 29.7% NM NM - NM	75,875 9,459 380 (14,343) 174 - (3,408) (456)	73,438 8,892 (1,526) (11,062) 558 698 (3,408) (863)	3.3% 6.4% NM 29.7% (68.8%) NM - (47.2%)
	17,014	16,777	1.4%	67,681	66,727	1.4%
	9,430 7,584	9,370 7,407	0.6% 2.4%	37,275 30,406	38,454 28,273	(3.1%) 7.5%
	17,014	16,777	1.4%	67,681	66,727	1.4%

Note:

NM - Not meaningful

1)The net fair value (gains)/losses on investment properties, net of deferred tax comprises of the following figures.

Group
Fair value losses/(gains) on investment properties Deferred tax (benefits)/expenses Net fair value (gains)/losses on investment properties, net of deferred tax	Quarter		Full Year
	4Q 2018	4Q 2017	31 Dec 2018	31 Dec 2017
	S$'000	S$'000	S$'000	S$'000
	5,358 (19,701)	(13,367) 2,305	5,358 (19,701)	(13,367) 2,305
	(14,343)	(11,062)	(14,343)	(11,062)

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FIRST REAL ESTATE INVESTMENT TRUST

2018 FULL YEAR UNAUDITED FINANCIAL STATEMENTS & DISTRIBUTION ANNOUNCEMENT

2)In 2016, the Trust issued S$60.0 million of subordinated perpetual securities. The perpetual securities confer a right to receive distribution payments at the rate of 5.68% per annum, with the first distribution rate reset falling on 8 July 2021 and subsequent resets occurring every five years thereafter. Distributions under the perpetual securities will be payable semi-annually in arrears on 8 January and 8 July in each year on a discretionary basis. Any distribution unpaid will be non-cumulative as stated in the terms and conditions of the perpetual securities.

1(b)(i) Statements of Financial Position

Assets

Non-current Assets Plant and equipment Investment properties Investments in subsidiaries Loan receivable, non-current Deferred tax assets

Other receivable, non-current Total non-current assets

Current Assets

Trade and other receivables, current Loan receivable, current

Other assets, current

Other financial assets, current Cash and cash equivalents Total current assets

Total Assets

Non-current Liabilities Deferred tax liabilities

Other financial liabilities, non-current Derivative financial instruments Total non-current liabilities

Current Liabilities Income tax payable

Trade and other payables, current Other financial liabilities, current Other liabilities, current Derivative financial instruments Total current liabilities

Total Liabilities

Net Assets

Represented by:

Net assets attributable to unitholders

Perpetual Securities holders' fund

Net assets attributable to perpetual securities holder

Note	Group		Trust
1 2 3 4 4	31 Dec 2018	31 Dec 2017	31 Dec 2018	31 Dec 2017
	S$'000	S$'000	S$'000	S$'000
	68 1,345,295 - - 1,368 27,035	- 1,349,303 - - 1,213 27,035	- 34,900 778,734 39,415 1,368 -	- 35,500 804,472 44,239 1,213 -
	1,373,766	1,377,551	854,417	885,424
	32,391 - 4,833 26 27,758	25,982 - 4,573 - 15,741	17,548 4,191 251 - 18,314	13,287 4,191 25 - 8,194
	65,008	46,296	40,304	25,697
	1,438,774	1,423,847	894,721	911,121
	31,850 386,761 250	51,396 278,125 512	- 386,761 250	- 278,125 512
	418,861	330,033	387,011	278,637
	1,989 16,135 109,658 22,793 185	2,000 18,216 198,324 22,795 164	- 17,176 109,658 1,965 185	- 23,931 198,324 1,926 164
	150,760	241,499	128,984	224,345
	569,621	571,532	515,995	502,982
	869,153	852,315	378,726	408,139
	808,275 60,878	791,437 60,878	317,848 60,878	347,261 60,878
	60,878	60,878	60,878	60,878
	869,153	852,315	378,726	408,139

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