ASTRO JAPAN PROPERTY GROUP ASX/Media Release
24 February 2016
Please find attached the following documents relating to Astro Japan Property Group's Half Year Results to 31 December 2015:
Media Release
Investor Presentation
AJA will present its half year results this morning at 11.00am (Sydney time). The results presentation will be hosted by Mr Eric Lucas, Senior Advisor to AJA. Dial-in details for participation in the conference call are located on the AJA website, www.astrojapanproperty.com.
Eric Lucas John Pettigrew
Senior Advisor Chief Financial Officer
Phone: +61 2 8987 3900 (Australia) Phone: +61 2 8987 3902
+81 3 3238 1671 (Japan)
Astro Japan Property Group is a listed property group which invests in the Japan real estate market. It currently holds interests in a portfolio comprising 30 retail, office and residential properties. Asset management services in Japan are generally undertaken by Spring Investment Co., Ltd.
AJA is a stapled entity comprising Astro Japan Property Trust (ARSN 112 799 854) and Astro Japan Property Group Limited (ABN 25 135 381 663). For further information please visit our website: www.astrojapanproperty.com.
ASX/Media Release
24 February 2016
Underlying profit after tax up 29.3% on the prior corresponding period to A$17.2 million primarily as a result of increased net property income and savings in borrowing costs
Statutory net profit after tax of A$54.2 million, a substantial increase from A$6.1 million for the prior corresponding period
Increase in the value of the property portfolio to ¥87.1bn (A$989 million), from ¥85.3bn at 30 June 2015 primarily as a result of upward property revaluations
Distribution of 18 cents per security for the half year, slightly higher than guidance
NTA up 11.0% to A$7.15 per security in the six-month period, as a result of Yen strength vs A$ and upward property revaluations
Astro Japan Property Group (ASX: AJA) today announced an underlying profit after tax of A$17.2 million for the half year ended 31 December 2015, 29.3% higher than the prior corresponding period. This was the result of increased net property income, savings on borrowing costs achieved through refinancings during the prior year and an approximately 9% strengthening of the Japanese Yen against the Australian dollar. Underlying profit after tax is a measure which the Directors believe accurately and consistently reflects the underlying business performance of AJA.
The underlying result for the half year reflects an increase in net property income to ¥2.33 billion, up 4.5% on the prior corresponding period in Yen terms (Australian dollar terms A$26.5 million, up 14.7%) primarily due to asset acquisitions. On a like for like portfolio basis and excluding currency movements, net property income increased by 1.8%.
Statutory net profit after tax of A$54.2 million was reported for the half year, up from A$6.1 million in the prior corresponding period. This substantial increase in the statutory result is mainly driven by foreign exchange rate gain on the fair value of net assets of A$24 million compared to a loss of A$10.7 million in the prior corresponding period. The positive impact of upward property revaluations of A$10.7 million (compared to A$3.8 million in the prior corresponding period) was off-set by an increase in the fair value of interest bearing debt of A$2.9 million. The increase in property portfolio valuations continues the trend of firming in Japanese asset values.
Distribution for the six months ended 31 December 2015 of 18 cents per security is to be paid on or about 29 February 2016. The distribution of 18 cents per security is less than underlying earnings of
28.3 cents per security, with the balance used for capex maintenance and reserves, loan amortisation and capital management.
AJA's total property portfolio carrying value has increased to ¥87.1 billion as at 31 December 2015 from ¥85.3 billion as at 30 June 2015, due to an increase in fair value of approximately ¥1.2 billion for the half year and the purchase of a small additional interest in the Musashino Towers property in August 2015 for ¥0.6 billion. In Australian dollar terms, the value of the portfolio increased by nearly 13% over the six months, from A$877.5 million at 30 June 2015 to A$989 million at 31 December 2015. The weighted average capitalisation rate used by the independent valuers for the portfolio at 31 December 2015 has tightened from 5.26% at June 2015 to 5.20%.
Portfolio occupancy by area continues to remain high at 97.5% as at 31 December 2015 compared to 97.3% as at 30 June 2015.
Mr Eric Lucas, Senior Advisor to AJA, said "We are pleased that asset values continue to show a positive trend, with a fourth consecutive half-yearly increase in the like-for-like value of the portfolio. Occupancy levels continue to remain strong, with portfolio lease cancellations at multi-year lows.
Overall we are seeing more stability and firmness in rents than for some years."
As at 31 December 2015, NTA was A$7.15 per security compared to A$6.44 per security as at 30 June 2015 primarily as a result of strengthening of the Japanese Yen against the Australian dollar, with 18 cents per security of this increase due to the increase in property valuations.
On 4 December 2015 Arabesque S Godo Kaisha (JPTGK) was refinanced with a new 10 year senior loan of ¥3.4 billion (A$37.8 million). The previous loan was scheduled to mature in May 2018.
The refinance reduced annual AJA portfolio amortisation payments from 3.5 cents per security to 3.3 cents per security. The weighted average maturity of AJA's debt stood at 7.3 years as at 31 December 2015.
Including proceeds from the sale of Sun Ace Tokugawa earlier this month, AJA holds excess cash the equivalent of approximately A$50 million at ¥81:A$1 (almost all is held in Yen), equal to approximately 11% of AJA's current NTA. This amount is after setting aside funding for the half year distribution.
Mr Eric Lucas, Senior Advisor to AJA, said "With substantial improvements to post-GFC debt terms now obtained and several smaller asset sales achieved, our focus is on deploying available cash in the most efficient way to sustainably increase earnings and distributable cash per security. It is expected that this will be undertaken through a combination of asset acquisitions offering effectively leveraged returns and security buy-backs."
FY2016 underlying profit after tax is expected to be 20-25% higher than FY2015, between 53 cents per security and 55 cents per security (A$32 million and A$33.5 million), assuming an average foreign exchange rate of ¥82:A$1 for the second half and no material performance fee payable to the Japan Asset Manager.
With distribution for H1 FY2016 at 18 cents per security and guidance for H2 FY2016 at 18 cents per security, full year distribution is expected to be 36 cents per security, an increase of 26.3% on FY2015.
Eric Lucas John Pettigrew
Senior Advisor Chief Financial Officer
Phone: +81 3 3238 1671 (Japan) Phone: +61 2 8987 3902
Astro Japan Property Group is a listed property group which invests in the Japan real estate market. It currently holds interests in a portfolio comprising 30 retail, office and residential properties. Asset management services in Japan are generally undertaken by Spring Investment Co., Ltd.
AJA is a stapled entity comprising Astro Japan Property Trust (ARSN 112 799 854) and Astro Japan Property Group Limited (ABN 25 135 381 663). For further information please visit our website: www.astrojapanproperty.com.
Astro Japan Property Group issued this content on 24 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 February 2016 15:00:11 UTC
Original Document: http://www.astrojapanproperty.com/wp-content/uploads/2016/02/240216-Media-Release-and-Investor-Presso-240216-Final.pdf
