2Q & 1H FY25/26 Financial Results Briefing

Morning, everyone. Thanks for joining us this morning for MIT Home Quarter and First Half Financial Year 2526 results briefing. MIT has released its results today after market closed. We have the matching team to present the key highlights of the results. Mr. Lili C.O., Co-game phone CFO, Mr. Peter Tan, Head of Investment, Mr. Rintam Head of Asset Management, the same short team here of marketing. Pop us to gain phone to bring us to the results highlights. Good morning, everyone. Thanks for joining us today. So for second quarter FY2526, year on year, our net property income decreased due to loss of income from the divestments of three industrial properties in Singapore, which we have completed in August. Our contributions from the North American portfolio from one new world was to your scholar.

This was partially offset by the higher contribution for acquisitions we did end of last year, as well as the competition of final fee that works in May 25. Boring costs due to repayment of borrowings with the divestment proceeds, lower interest on unhedged working rate loans and effects of weaker US dollar. This was offset by higher borrowing costs for the portfolio. Distribution declined by venture decrease due to higher borrowing costs from repurposing of matured interest rate swaps, as well as pre-termination of these at one of the joint venture properties in prior year. So overall, our distribution to unit holders decreased 5.3% to 19.7 million. And our distribution increased 5.6%, 3.18 cents. So in quite a year, we also distributed about 3.3 million of divestment gain from divestment of time call.

So if we exclude that, our DPU would have decreased 2.2% instead. We first have, most of the reasons are quite similar, so I'll skip that. So for quarter on quarter, coordinate property income decreased due to loss of income from the divestment of the three industrial properties in Singapore. So the full quarter impact of NLP summarization for the fill out works at one of the property in Singapore portfolio, higher operating expenses at North American and Singapore portfolio. This is a partial offset by the full quarter contribution from the final fill out works at Osaka data center. So on borrowing costs, it's lower mainly due to repayment offerings with the divestment proceeds and no interest on unhatched floating rate. Overall, our distribution to unit holders decreased 2.7% to 90.7% and DPU decreased for quarter 2.8% to 3.18 cents.

From capital management perspective, our total borrowings reduced to 3.1 billion, largely due to the repayment of loans with the divestment proceeds. Accordingly, our aggregate leverage ratio decreased to 37.3% and our interest rate, hedge ratio increased to close to 93%. With the lower leverage ratio, this provides us with ample debt headroom to capture any potential growth of our cities. On average borrowing costs for the quarter used slightly to 3%, largely due to repayment of higher cost debt with the divestment proceeds and lower interest rate on the unhatched floating rate loans. Having said that, we do have interest rate slots coming due every year. For this financial year as well as next financial year, we do have about 600 million of IRS due or coming due, which we expect to have impact on borrowing costs.

Even these interest rates were previously looking when interest rates were lower. So overall, the borrowing costs for this financial year, we expect to be around 3.1 to 3.2%. And for next financial year, the interest cost will be about 3.3 to 3.4%. That maturity profile remains now staggered, no more than 24% total debt maturing in any single year. And the average debt tenure of three years. On the FX front, as much as feasible, we try to draw local currency loans to provide natural hedge for our OCS investments. This helps to protect FX fluctuation on our NAB and DPU. So for example, about 50 to 52% of our portfolio are funded with new loans. So what I've told you to the US by AUM is about 47%.

Next financial borrowing our distributable income exposure to US dollars about 25 to 20%. This means that in terms of equity for every 5% depreciation in the dollar, impact our distributable income is only about 1.5%. So for the remaining of the foreign currency, we enter into FX forwards to hedge the income into SING dollar. So we have about 86% of our next 12 months distributable income is hedged or derived in SING dollar. Come to Lily to go to SING. Good morning, I will cover the operational performance. So if we can start off with the occupancy of the portfolio, I think that's something about our treatment. The portfolio basis, the occupancy rate has, I would say, remained relatively flatish.