This article is from the Australian Property Journal archive
RAM Essential Services Property Fund have suffered a drop in their funds from operations for H123, citing an inflationary environment as a factor.
H123 FFO for REP was recorded as $14.4 million, down from $21.7 million in H2 22.
“The resilient characteristics and inflation protections embedded in the fund are shining through and allowing the fund to continue delivering consistent and stable operational performance,” said RAM head of real estate Matthew Strotton.
“With 90% of income exposed to annual escalators, the fund’s strong rent review profile provides a high degree of embedded growth within an inflationary environment.
NTA has moved from $1.04 to $1.03.
The results announcement was optimistic about RAM’s performance in the six months to December 2022. They outlined an underlying growth is occurring in the company from positive leasing activity – with spreads of +10% across 22 renewals.
Statutory net profit has also taken a hit for the company at just $3.33 million. 6 months prior it was $61.5 million.
Just like their last results announcement, the DPS guidance is 5.7-5.8 cents reaffirmed.
RAM has also strengthened their balance sheet. They reported gearing of 32.8%, in the low end of the targeted range and comfortably within covenants.
They increased pro-forma debt headroom to $44 million with extended maturity of 3.1 years and increased interest rate hedging to 59% and extended hedge duration to 2.1 years.
“The portfolio continues to perform well within the current environment. Underlying operations are robust, asset valuations have remained stable, and the value-add pipeline continues to progress,” said CEO Scott Kelly.
“We’ve strengthened the balance sheet, we have good visibility on the second half and we remain on track to continue delivering stable and predictable income for security holders,” he added.
