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Results Note – Axis REIT (ADD, maintain) - Still an acquisition driven growth story




Affin Hwang Investment Bank Bhd


22 Apr 2013





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Within expectations Axis REIT posted a commendable 8.2% growth in 1QFY13 revenue of RM34.9m, growth is driven mainly by: 1) 5 new acquisitions completed in FY12, namely Bayan Lepas Distribution Centre, Seberang Prai Logistic Warehouse 3 (both were acquired in 1QFY12), Emerson Industrial Facility Nilai (acquired in 3QFY12), Wisma Academy and Annex properties (acquired in 4QFY12), and; 2) 9.9% rental revisions in 1QFY13. The impact was negated by higher interest expenses (+32.1% yoy) as Axis REIT has geared up slightly (1Q13: 33.9% vs. 1Q12: 28.8%) to fund acquisitions. 1QFY13 realised net profit grew by +3.5% yoy to RM20.5m, accounting for 22% and 24% of our and concensus full year estimates. We deem the results as in line with expectations, as we expect a stronger 2HFY13, lifted by new asset acquisitions in the pipeline (RM100m). Axis REIT has proposed a 4.5 sen DPU (99% payout; 1QFY12: 4.3 sen). Also, the REIT has determined that the Income Distribution Reinvestment Plan (IDRP), which allows unit holders to reinvest their income distribution in new units, will apply to the 1st interim DPU of 4.5 sen, at an issue price of RM3.40 per unit.

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