Al-`Aqar Healthcare REIT Annual Report 2019

Australian Segment The Australian segment’s contribution to Al- `Aqar’s revenue and NPI remained largely unchanged in FY2018 at 10.9% and 11.3% respectively. Revenue and NPI contribution decreased 0.3% (from RM11.6 million to RM11.5 million) and 0.6% (from RM11.4 million to RM11.4 million) respectively. PROFIT FOR THE YEAR Profit for the year was RM76.1 million (FY2018: RM91.3 million) comprising realised profit of RM63.4 million (FY2018: RM61.0 million) and unrealised profit of RM12.7 million (FY2018: RM30.3 million). Realised profit increased 3.9% or RM2.4 million in FY2019 mainly due to full rental income was received upon settlement of the KPJUC Balance Purchase Consideration in November 2018 as well as annual increment on rental income. The unrealised profit of RM12.7 million mainly relates to fair value gains on investment properties, which was lower by RM17.6 million. INCOME AVAILABLE FOR DISTRIBUTION Total income available for distribution for FY2019 of the Fund was RM60.0 million. This was derived from net realised income of RM61.3 million, less capital expenditures incurred during the year of RM1.3 million. The Fund had distributed interim income distributions of 5.73 sen per unit amounting to approximately RM42.2 million for the period from 1 January to 30 September 2019. On 30 January 2019, the Fund declared a final income distribution of 2.02 sen per unit totalling RM14.9 million for the period from 1 October to 31 December 2019. The said distribution was paid on 28 February 2020. Total distribution per unit (“DPU”) for FY2019 is 7.75 sen per unit totalling RM57.0 million, which represents 95% of the income available for distribution. STATEMENT OF FINANCIAL POSITION Al-`Aqar’s total asset value increased by RM0.094 billion to RM1.67 billion for current year. The increase was mainly due to acquisition of KPJ Batu Pahat Specialist Hospital as well as gain on fair value adjustment of investment properties of RM13.1 million. With the acquisition of KPJ Batu Pahat being financed by borrowing, Al-`Aqar’s borrowing increased from RM603.70 million to RM683.40 million, resulting in a gearing ratio of 40.82% against previous year end of 38.19%. STATEMENT OF CASH FLOW Operating Activities Net cash generated from operating activities was RM83.7 million in FY2019 which was higher than RM57.9 million in FY2018. Higher amount in FY2019 was mainly attributable to the higher net property income. Investing Activities Al-`Aqar used RM1.3 million for enhancement to investment properties during the financial year and offset by income received on investment of RM1.6 million. Financing Activities Al-`Aqar increased its net drawdown of borrowings to fund the acquisitions of KPJ Batu Pahat Specialist Hospital as mentioned earlier. As at 31 December 2019, cash and cash equivalent was RM67.5 million, a decrease of RM5.2 million from RM72.7 million (FY2018). REALISED PROFIT INCREASED 3.9% OR RM2.4 MILLION IN FY2019 MAINLY DUE TO FULL RENTAL INCOME WAS RECEIVED UPON SETTLEMENT OF THE KPJUC BALANCE PURCHASE CONSIDERATION IN NOVEMBER 2018 AS WELL AS ANNUAL INCREMENT ON RENTAL INCOME Al-`Aqar Healthcare REIT 03 STRATEGIC PERFORMANCE 39