ARA ASSET MANAGEMENT LIMITED - Recurrent management fees up 9% to S$61.0 million
- Net profit up 20% to S$38.7 million
1H2014 Results Highlights1H2014 1H2013 % Change |
Revenue |
Management fees (S$'000) 60,984 56,155 9% |
Acquisition, divestment and performance fees (S$'000) 3,216 2,292 40% |
Finance income (S$'000) 12,190 5,640 116% |
Other income (S$'000) 2,220 43 n.m. |
Total Revenue (S$'000) 78,610 64,130 23% |
Results from operating activities (S$'000) 44,989 36,650 23% |
Share of Profit of Associates (S$'000) 1,949 1,938 1% |
Net Profit attributable to equity holders of the Company (S$'000) 38,664 32,111 20% |
EPS1 (S cents) 4.57 3.80 20% |
2014 ("1H2014").
Recurrent management fees for 1H2014 grew 9% year-on-year to approximately S$61.0 million, due to higher REIT management fees received as a result of the improved asset performance post the various asset enhancement initiatives undertaken, as well as the fees arising from the acquisitions made by the various REITs in FY2013 and 1H2014, all of which have resulted in the higher property valuations and recurrent revenue of the REIT portfolios under management. Compared to the same period last year, the Group has in 1H2014 received REIT management fees from the two privately-held Korean Real Estate Investment Trusts, namely ARA-NPS Real Estate Investment Company, and ARA-NPS REIT No. 2, as well
1 Based on net profit attributable to equity holders of the Company, and the issued share capital of 845,151,093 shares as at 30
June 2014.
Page 1 of 4
as portfolio management fees from the Morningside Investment Partners, LLC ("MIP") and Straits Investment Partners ("SIP"). Fees were also higher from the ARA Harmony Fund and ARA China Investment Partners, LLC ("CIP"). These were partially offset by the reduced fees from the ARA Asia Dragon Fund ("ADF"), which has entered into its divestment phase since
2012.
The acquisition, divestment and performance fees recorded for 1H2014 increased 40% to approximately S$3.2 million from S$2.3 million in the corresponding period last year. This increase was primarily due to acquisition fees received in 1H2014 relating to Prosperity REIT's acquisition of 9 Chong Yip Street in January 2014 and Suntec REIT's progress payments during the quarter for its acquisition of 177 Pacific Highway.
Finance income and other income for 1H2014 were higher at approximately S$12.2 million and S$2.2 million respectively, mainly due to a net gain on fair valuation/disposal of financial assets amounting to approximately S$4.8 million, in addition to an increase in distribution income of approximately S$1.8 million, which is attributed to a higher distribution of profits by the ADF subsequent to the divestment of properties under its portfolio as well as higher distribution income received from the various REITs held by the Group.
An interim dividend of S$0.023 per share has been declared for the financial period from 1
January 2014 to 30 June 2014, payable on 22 August 2014.
Commenting on ARA's results, ARA Group CEO, Mr. John Lim said: "The Group continues to deliver a steady financial performance overall. We will continue to drive the growth in recurrent management fees through our existing REITs and private funds and in the establishment of new products."
In April 2014, ARA completed the acquisition of Macquarie Real Estate Korea Limited (since renamed as ARA Korea Limited), a real estate management company based in Seoul. With this, ARA currently manages two privately-held Korean Real Estate Investment Trusts invested in office properties with a combined value of approximately S$750 million as at 30 June 2014. The Group is working towards expanding this platform over time.
Subsequently in May 2014, ARA launched the ARA Summit Development Fund I, L.P., mandated to invest in real estate development projects and projects with value enhancement potential in Australia and South East Asia. With this, ARA has expanded its suite of private
real estate funds under ARA Private Funds to range from development-focused products to
Page 2 of 4
core investment products, and would extend ARA Private Fund's geographical reach in Asia to include Australia.
With these, the Group's AUM increased to approximately S$25.8 billion as at 30 June 2014.
Mr. John Lim commented on the new development fund: "We are pleased to launch this new Asia-focused development fund that would broaden our funds management platform and provide another engine of growth in AUM for ARA."
Mr. Lim added, "We will be partnering reputable developers with a good local track record in property development to deliver the targeted returns for investors. Akin to the ADF series, there are potential opportunities in creating a series of successor funds to the SDF I in the future."
Page 3 of 4
About ARA Asset Management LimitedARA is a real estate fund management company listed on the main board of the Singapore Exchange. ARA's business is focused on the following primary segments:
(a) REITs - The Group is one of the largest REIT managers in Asia ex-Japan and currently manages six REITs listed in three countries namely, Fortune REIT dual-listed in Singapore and Hong Kong, Suntec REIT and Cache Logistics Trust listed in Singapore, Hui Xian REIT and Prosperity REIT listed in Hong Kong and AmFIRST REIT listed in Malaysia. The Group also manages two privately-held REITs in South Korea;
(b) Private real estate funds - The Group manages several private funds investing in real estate in Asia;
(c) Real estate management services - The Group provides property management services and manages the award-winning Suntec Singapore International Convention & Exhibition Centre; and
(d) Corporate finance advisory services - The Group has an in-house advisory arm providing corporate finance advisory services to related corporations.
For more information, please contact:
Cheryl Seow
Group Chief Financial Officer
Group Finance cherylseow@ara.com.hk
Tel: (65) 6835 9232
Fax: (65) 6835 9672
Marilyn Tan Assistant Director Corporate Finance marilyntan@ara.com.hk
This announcement may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of uncertainties, risks and assumptions. Representative examples of these factors include but are not limited to general market and economic conditions, interest rate trends, competition from other real estate investors, changes in operating expenses including employee wages and benefits, changes in government policies, and the continued availability of financing in the amounts and terms necessary to support future business. You are cautioned not to place undue reliance on any of the forward-looking statements in this announcement, which are based on the current view of management on future events.
Page 4 of 4
|
distributed by
|
