GLP reported 3QFY15 PATMI (ending Dec-14) of US$112.4m, which decreased 36.2% YoY mostly due to lower share of results of JV/associates and higher operating expenses from an increased property portfolio and business expansion, partially offset by higher fair value gains of investment properties. Excluding one-time items, core 9MFY15 PATMI is estimated to be US$192m, which makes up 73% of our FY15 forecast which we judge to be in line with expectations.

In terms of the topline, 3QFY15 revenue inched up 0.7% to US$179.0m mainly due to the completion and stabilization of developmental projects in China with increased rents and one month’s contribution of the Brazil portfolio acquired in Jun-14, partially offset by the deferred rental revenue of Airport City Development Co, the sale of 11 properties in Japan in Mar-14 and Sep-14, and the weakening of the Yen versus the US dollar.

We will speak with management about these results later today and, in the meantime, maintain BUY with a fair value estimate of S$2.99.

Source: OCBC Research - 5 Feb 2015