In This Article:
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Total Income: Increased 22.2% to $100.6 million.
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Net Profit: $157.1 million, including $93.2 million in net unrealized gains.
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Interim Distribution: $9.20 per ordinary unit, up 2.0% from the previous year.
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Portfolio Occupancy: Increased to 98.7%, up 1.3 percentage points.
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Weighted Average Lease Expiry (WALE): Increased to 4.4 years.
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Rental Growth: Like-for-like rental growth of 3.3%.
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Market Rent Reviews: Average increase of 2.7% for five Bunnings warehouses.
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Weighted Average Capitalization Rate: Fell 10 basis points to 5.43%.
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Net Assets: $3.92 per unit, compared to $3.74 per unit at December 31, 2023.
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Gearing Ratio: 21.4%, at the lower end of the preferred range of 20% to 30%.
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Interest Rate Hedging Cover: 52.4% of borrowings with a weighted average term of 1.4 years.
Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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BWP Trust reported a like-for-like rental growth of 3.3% for the half-year ending December 31, 2024.
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The portfolio occupancy increased to 98.7%, reflecting a 1.3% improvement from the previous period.
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The Trust achieved a net profit of $157.1 million, including $93.2 million in net unrealized gains.
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An interim distribution of $9.20 per ordinary unit was declared, marking a 2.0% increase from the previous year.
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BWP Trust successfully negotiated expansions and upgrades with key tenants, including a $14 million Bunnings expansion in Pakenham and an $11 million redevelopment in Midland.
Negative Points
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Operating cash flow was significantly lower than net profit, raising questions about cash management.
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Expense growth slightly outpaced income growth, attributed to higher CPI inflation and increased management fees.
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The Trust's gearing ratio increased to 21.4%, though still within the Board's preferred range.
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Moody's downgraded BWP Trust's outlook, partly due to concerns over debt refinancing.
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Some lease options remain unexercised, creating uncertainty about future occupancy and rental income.
Q & A Highlights
Q: Can you explain the difference between your profits and operating cash flow? A: David Hawkins, Head of Finance: The difference is due to transaction costs related to NPR that were paid on July 1.
Q: How is the outlook for inorganic growth given the current market conditions? A: Mark Scatena, Managing Director: We are actively looking at opportunities and have seen increased transaction activity. We remain focused on delivering growth in earnings and are optimistic about the market.