Jul 23, 2022

Cory Diary : Sabana Results 1H22

SABANA INDUSTRIAL REIT’S 1H 2022 result is as Good as it can get in-line with expectation. Being consistent delivering and meeting high yield this makes the Reit quite attractive.

-   DPU was 1.59 cents, 7.4% higher y-o-y. A slight increase if we compare to 2H21.
    Yield of 7.07% annualized at $0.45 Stock Price.

There are items to monitor during this increasing rate cycle and Sabana has them listed as follow.

Capital Management

• Average all-in financing cost of 3.35%, interest coverage ratio at 4.0 times
• Aggregate leverage stood at 33.4%

Interest Exposure
• 75.3% of borrowings are on fixed rates with an average term of 2.4 years
• Every potential 20 bps increase in interest rates may result in $0.15m decrease in
distributable income or 0.5% reduction (equivalent to 0.01 cents) on DPU(1) per annum

If assume further 200 bps rate hike in total this year, that will be 0.1 cents impact to Sabana DPU. Yield will decrease to 6.7% which is still respectable. And this is assuming no further increase in rental income. This piece of info helps as ICR is only 4 times.



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