The Positives And Negatives That Investors Should Know M1 Ltd’s Latest Earnings Update

M1 Ltd (SGX: B2F) is the smallest player in Singapore’s telecommunications industry. 

M1 Limited, together with its subsidiaries, provides mobile and fixed communications services to consumers and corporate customers in Singapore.

This undervalued stock recently released its 2018 third-quarter earnings update. In this article, Multi Management Future Solutions research some good and not-so-good points from its results announcement.

The positives

M1’s revenue improved by 10.1 % YOY to S$274.6 million. Service revenue also inched up by 1.9% YOY to S$190.2 million.

M1’s balance sheet improved. As of 30 September 2018, the telco’s net debt stood at S$363.5 million and its gearing ratio was 0.7; a year ago, M1’s net debt and gearing were S$397.9 million and 1.0, respectivel. 

The number of postpaid mobile subscribers for M1 increased by 7.1% year-on-year to 1.36 million. Similarly, fiber customer numbers jumped by 12.3% YoY to 204,000.

The average revenue per user (ARPU) for M1’s fiber broadband business increased by 4.3% to S$38.60 compared to a year ago.

The Negatives

The mobile telecommunication and international call segments reported YOY declines in revenue of 0.1% and 29.4%, respectively.

Prepaid mobile subscriber numbers fell by 20.7% to 584,000. This resulted in a decline in the segment’s market share from 22.3% a year ago to 19.8%.

ARPUs for postpaid, prepaid, and data plan were down by 2.6%, 2.8%, and 16.5%, respectively, compared to 2017’s third quarter.

Singapore REITs That Increased Their DPU Last Quarter

Singapore REITs are the center point of attraction among Singapore stock market.

Multi Management Future Solutions choose the two important REITs to invest at the end of 2018 as per the trader's interest. 

EC World Real Estate Investment Trust and Manulife US Real Estate Investment Trust are two REITs that delivered strong growth in distributions per unit in the last quarter. Here we are presenting some financial facts which will help you to invest in these Singapore REITs.

EC World Real Estate Investment Trust invests in real estate assets. The Trust focuses on properties in the People's Republic of China. being used for supply-chain management, e-commerce, and logistical purposes. The latest quarter report of REIT recorded growth in all its core figures. Gross revenue and net property income increased by 0.1% and 0.5% respectively. Due to the contribution from its maiden acquisition of the Wuhan property the growth of REIT become larger. 

The DPU and distributable income grew at a much faster pace than its top line, increasing 10.0% and 9.0% respectively. The trust gets an advantage from the absence of a 5% withholding tax that was charged in 2017 and lower expenses. The REIT also has one of the lowest gearing ratios among the REITs listed in Singapore, with a gearing ratio of 30.7%. 

EC World REIT has one of the highest yields in the market at a tasty 8.67%.

Manulife US Real Estate Investment Trust is US Real Estate Investment Trust invests in real estate properties. The Company focuses on office properties located in the United States. The companies most recent quarter, gross revenue and net property income increased by 75.3% and 74.9% respectively from to the new accession. The distribution per unit increased by a whopping 33.6% to US$0.0151.

The performance of this REIT amaze the investors as the two new accessions would have diluted DPU based on a pro forma results of 2017. On the other side, with the two latest accessions, the REIT’s gearing now stands at 37.4%, just a few percentage points shy of the 45% regulatory limit.

At the time of writing, units of Manulife REIT exchange hands at S$0.775. If its DPU is annualized, the REIT will have a yield of 7.8%.

CDL Hospitality Trust Posts 4.8% Lower DPU In Q3 Report

CDL Hospitality Trust (CDL-HT) recently reported lower distributions per unit (DPU) in the Q3 report. The lower distribution was due to, ranging from divestments and a drop in contribution due to ongoing renovations.

CDL Hospitality Trusts is one of Asia’s leading hospitality trusts with assets valued at S$2.7 billion. CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust (“H-REIT”), a real estate investment trust, and CDL Hospitality Business Trust (“HBT”), a business trust.

The newest report was for the stapled trust’s Q 3 earnings results for the year ending of 2018. CDL-HT is one of Asia’s leading hospitality trusts under the segment of undervalued stock with a portfolio of 15 hotels and two resorts comprising a total of 5,002 rooms and a retail mall. These properties are geographically spread across the world, from Singapore to Australia, Japan, New Zealand, United Kingdom, Germany, and the Maldives.

Here Multi Management Future Solutions presenting the highlight of the quarter result as per the traders result:

The gross revenue dropped by 8.8% year-on-year to S$50.0 million and the net property income decreased  10.20% to S$36.2 million. The steep decline in net property income was attributed to the divestment of two hotels in Australia.

The decline in distribution income was seen by 3.9% to S$26.3 million due to the pullback in revenue and net property income compared to the same period. The trust’s distribution per unit (DPU) fell 4.8% to 2.18 cents as a result.

The CDL-HT’s debt profile data shows the trust’s gearing stood at 33.8%, an increase from the gearing of 33.2% recorded three months ago. The trust’s weighted average annualized interest rate stood at 2.4% with an average debt duration of 2.9 years. Around 66% of the REIT’s debt was on fixed-rate loans.

The trusts’ portfolio had an average holding rate of 90.8% at the end of the quarter, increase from 88.7% year on year. The average daily rate and revenue per available room came in at S$182 and S$165, a decline of 2.6% and 0.3% year-on-year respectively.

CDL-HT’s net asset value slide down by 2% compared to the previous quarter coming in at S$1.48.