IGB Real Estate Investment Trust (IGBREIT) ended FY22 with 4QFY22 realised net profit of RM83.9m (+14.1% YoY, +0.7% QoQ) which came in within our and consensus estimates. For FY22, Group realised net profit of RM336.2m (+68.0% YoY) constituted c.97% and c.102% of our and consensus full year estimates. The revaluation surplus from its two malls amounted to RM60m during the quarter. The improved results again attributed to the lower rental support provided to tenants in the current quarter arising from the economic reopening and improving retail sales of tenants. Group net property income (NPI) and profit after taxation YTD were also higher by 52.8% and 68.0% respectively to RM481.1m and RM336.2m. All told, we maintain our earnings estimates. We also keep our Neutral call and RM1.72 TP, given narrowing yield spreads and risk of slowing economic growth.
- FY22 revenue rose 39.3 % YoY to RM556.4m while NPI rose 52.8 YoY to RM420.2m as profits were bolstered by lower rental support provided to tenants in the current period-to-date arising from the economic reopening and improving retail sales of tenants. The distributable income for FY22 amounted to RM361.9m, consisting of realised profit of RM336.2m and the non-cash adjustments arising mainly from fair value gain of RM60m and manager fee payable in units of RM24.2m. Loan to total asset value is steady at 23%, with its average debt cost at 4.49% p.a.
- Both assets at almost full occupancy. As reported earlier, both assets are virtually fully-occupied with rental income remains resilient post pandemic. As at 4QFY22, average gross monthly rental income for Mid Valley Megamall is at RM15.28psf, while The Gardens Mall is getting RM13.39psf. In FY23, we understand that Mid Valley Megamall has 190 leases up for renewal (49.29% of total net lettable area(NLA)) while The Gardens Mall has 97 leases expiring in FY22 (49.63% of total NLA).
Source: PublicInvest Research - 20 Jan 2023
