Optimising gearing for growth
- FY23 DPU of 5.22 Scts driven by acquisitions in FY22; above our projections
- Accretive acquisitions and support from Sponsor enabled DHLT to maintain stable DPU despite weakening JPY
- Optimising gearing by delivering on acquisitions in Vietnam and another property in Japan, with total value of >S$50m
- Maintain BUY with slightly lower TP of S$0.75
Revenues and NPI higher y-o-y in JPY terms. In FY23, revenues and NPI, denominated in JPY terms, recorded a notable increase of 4.7% and 4.6% y-o-y, respectively. This growth was primarily attributed to the full-year contribution from properties acquired in December 2022, namely DPL Iwakuni 1 & 2, and D Project Matsuyama S. The acquisitions were estimated to have added c.S$2.2m in revenues during the year. However, when converted to SGD, revenues and NPI saw a decline of 3.7% and 5.0% y-o-y, respectively, as the weaker JPY offset the additional contribution from acquisitions.
FY23 DPU of 5.22 Scts came in above our projections. Despite the lower FY23 NPI in SGD terms, distributable income showed a 3.1% increase y-o-y, amounting to S$36.4m. This growth was primarily attributed to realised gains from hedging activities, and it is estimated that DHLT achieved an average hedge rate of approximately SGD1:JPY100 during FY23. Furthermore, the FY23 DPU of 5.22 Scts exceeded our projections by c.2.4%, mainly due to the favourable hedge rates achieved compared to our assumptions. FY23 DPU also exhibited a slight increase of 0.2% y-o-y, while 2H23 DPU of 2.61 Scts was similar to 1H23.
