Astro Japan Releases Upbeat Results for 1H16
Astro Japan's profits were boosted by a rise in property valuations
Astro Japan Property Group (ASX:AJA) is an Australian based property company focused on investing the Japanese real estate market. The group released a solid financial result for the 1H16 period with 29.3% growth in underlying profit after tax.
Astro Japan’s underlying profit after tax of A$17.2 million was underpinned by an increase in net property income coupled with savings on borrowing costs. Additionally, the result benefitted by the strengthening of Japanese Yen against the Australian dollar.
The underlying result, which the management considers to be an accurate reflection of the group’s performance, benefitted from a 4.5% increase in net property income to ¥2.33 billion (equating to A$26.5 million, up 14.7%).
Statutory net profit after tax surged to A$54.2 million from A$6.1 million in the previous corresponding period. This substantial increase in the statutory result was mainly driven by foreign exchange rate gain on the fair value of net assets of A$24 million compared to a loss of A$10.7 million in the pcp. The favourable impact of revaluations of A$10.7 million (A$3.8 million in 1H15) was off-set by a rise in the fair value of interest bearing debt of A$2.9 million.
As at 31 December 2015, Net Tangible Assets (NTA) were A$7.15 per share compared to A$6.44 per share as at 30 June 2015. The favourable exchange rate movements along with the increase in property valuations contributed to the rise in NTA.
Mr. Eric Lucas, Senior Advisor to Astro Japan, provided insights on the group’s strategies: “With substantial improvements to post-GFC debt terms now obtained and several smaller asset sales achieved, our focus is on deploying available cash in the most efficient way to sustainably increase earnings and distributable cash per security.”
Assuming an average exchange rate of ¥82:A$1 for the second half, the group expects 20-25% growth in underlying profit after tax for the FY16.
Astro Japan’s board recently announced 18 cents per share dividend for the 1H16 period and anticipates that it will distribute the same amount in the 2H16 period, bringing the full year distribution to 36 cents per share, an increase of 26.3% on FY15.
The upbeat announcement sent AJA up 2.4% to $5.5 as at 12:30 PM (AEDT).
Author: Matthew Dibb
Feb 24, 2016
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.