Filinvest REIT declares P0.112/share cash dividend at 6.14% annualized yield

The P0.112/share cash dividend (P548 million total) was declared by Filinvest REIT [FILRT 7.18 1.70%] from its Q2 adjusted funds from operations (AFFO) of P521 million (net income of P411 million). The dividends are payable on September 30, to shareholders of record on September 15. The dividend provides an annualized projected yield of 6.14% based on FILRT’s closing price yesterday, and an annualized projected yield of 6.30% based on FILRT’s IPO price of P7.00/share. This is in line with FILRT’s representations during its IPO sales push that it would maintain a 6.3% yield through 2021.

MB BOTTOM-LINE

One thing that jumps out is that the Q2 dividend is 105% of FILRT’s Q2 AFFO. While the REIT law says that a REIT must distribute at least 90% of its distributable income (adjusted net income), it’s not against that law for a REIT to distribute more money to shareholders than it made in the quarter, provided that it still crosses the 90% mark at the end of the year. FILRT had almost P1.3 billion in cash and cash equivalents at the end of Q2, so it won’t be struggling to make ends meet even if it does payout more than it makes (for now).

Is that level of payout sustainable? Probably not indefinitely, but this distribution level was part of the pitch FILRT and the Gotianun Family made to investors during FILRT’s IPO and it shouldn’t be a challenge for the REIT to maintain it for the remainder of the year. For comparison’s sake, we can consider AREIT [AREIT 37.15 0.95%], which distributed P478.8 million to shareholders through dividends in Q2 out of P475 of AFFO (90.7% payout ratio). 

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