SG Morning Highlights | Paragon Reit H1 2023 DPU Falls 15.7% to S$0.0242

Advancers / Decliners is 108 to 89, with 164.84 million securities worth S$168.71 million changing hands.

The number of property transactions in Johor Bahru – the southernmost city in Malaysia – is on the rise, as buyers hunt for deals ahead of the opening of a new railway shuttle link with Singapore in three years’ time.

The Johor Bahru-Singapore rapid transit system (RTS), as the project is called, is a 4 km cross-border service that's on track to be completed by the end of 2026, with as many as 10,000 commuters moving in both directions per hour.

The DPU translates to a distribution yield of 5.1 per cent, based on the real estate investment trust's (Reit) closing price of $0.96 as at June 30. The latest distribution will be paid out on Sep 22.

In a bourse filing on Monday (Aug 7), the Reit's manager said the fall in DPU was primarily due to higher finance costs amid the current high interest rate environment. The income available for distribution had shrunk by 13.8 per cent to S$70.6 million, from S$82 million in the corresponding period last year. Finance costs also hiked by S$14.7 million to S$25.5 million in H1 2023, from S$10.9 million in the year-ago period.

Distributable income rose 21.6 per cent to $52.2 million, from $42.9 million a year earlier, while gross revenue climbed 65.1 per cent to $103.1 million over the same period.

Revenue fell 38.7 per cent to RM462.2 million in the same period, from RM754.3 million a year earlier.

In a bourse filing on Monday (Aug 7), the company attributed the decline to a decrease in cleanroom gloves orders as end-demand for consumer electronics fell.

The decline in net profit came despite a 53.3 per cent rise in revenue to S$304.5 million, from S$198.7 million a year ago.

In a bourse filing on Monday (Aug 7), the group said that the year-on-year decline in net profit was mainly due to a lower share of results of equity-accounted investees, higher finance expenses, lower net change in fair value of investments designated at fair value through profit or loss as well as lower net change in fair value of investment properties.

The stapled group posted a 6.8 per cent increase in distributable income to US$8.7 million in H1 2023 from US$ 8.1 million in the same period in 2022.

The growth was attributed to higher gross operating profit and net property income, led by higher revenue offset by higher property taxes, during the period, the group said on Tuesday (Aug 8).