RESULTS FOR THE FINANCIAL YEAR ENDED 31 December 2011
1. BUSINESS OVERVIEW
BUSINESS SEGMENTS ARA ASSET MANAGEMENT LIMITED Business Segments REITs Private Real Estate Funds Real Estate Management Services Corporate Finance Advisory Services Revenue Recurrent (Primary Basis) Base Fees (Gross Property Value) Portfolio Management Fees (Committed Capital / Gross Property Value) Property Management Fees (Property Gross Revenue) Performance / Variable Fees (Net Property Income) Convention & Exhibition Service Fees (Gross Revenue) Revenue One off (Primary Basis) Acquisition / Divestment Fees (Gross Property Value) Performance Fees (IRR above Hurdle) Consultancy Fees (Project Vl Value) Advisory Fees (Purchase Vl Value) Return on Seed Capital 3
FUNDS & SERVICES Diversified & complementary fund platforms & services Listing Venue SGX ST & SEHK SGX ST SEHK Bursa SGX ST SEHK Focus REITs Suburban retail properties p in Hong Kong Prime office & retail properties p in Singapore Office & industrial/ office properties p in Hong Kong Commercial properties p in Malaysia Logistics properties in the Asia Pacific region Commercial properties p in the PRC Property Value (1) HK$16,388m S$7,698m HK$6,991m RM1,157m S$843m RMB 31,410m Private Real Estate Funds Description ADF ARA Asia Dragon Fund Flagship strategic and opportunistic private real estate fund investing in Singapore, Hong Kong, China, Malaysia and other emerging economies in Asia ADF II ARA Asia Dragon Fund II 2nd strategic and opportunistic private real estate fund investing in Singapore, Hong Kong, China, Malaysia and other emerging economies in Asia ARA Harmony Fund Single asset private real estate fund which owns the Suntec Singapore Int l Convention & Exhibition Centre g g p y Strategic alliance with Australian specialist real estate investment manager, APN Property Group (2) for private funds investing primarily in Australian real estate Fund Size US$1.1b (Committed Capital) US$1.0b (Targeted fund size) S$400m (Gross Asset Value) Real Estate Management Services Description Property management services provider Operations, sales and marketing services provider & consultant for convention, exhibition, meeting and event facilities Notes: (1) Property values as of last publicly announced valuation (2) ARA currently holds a 13.9% interest in APN Property Group 4
ASSETS UNDER MANAGEMENT S$20.2 billion (US$15.6 billion) as at 31 Dec 2011 22.0 20.0 REITs Real Estate 20.2 22.0 20.0 18.0 16.0 Private RE Funds Real Estate Private RE Funds Capital 17.1 18.0 16.0 14.0 12.0 Real let Estate t Management tservices 11.8 13.1 14.0 12.0 (S$b) 10.0 9.6 10.0 8.0 6.0 5.5 6.3 8.0 6.0 4.0 3.5 4.0 2.0 0.0 0.6 2.0 0.0 31 Dec 03 31 Dec 04 31 Dec 05 31 Dec 06 31 Dec 07 31 Dec 08 31 Dec 09 31 Dec 10 31 Dec 11 Assets Under Management (1) (S$ billion) 31 Dec 2011 31 Dec 2010 Change REITs Real Estate (2) 14.9 11.4 3.4 Private Real Estate Funds Real Estate 4.9 5.0 0.1 Private Real Estate Funds Capital (3) 0.2 0.3 0.1 Real Estate Management Services (4) 0.3 0.3 Total 20.2 17.1 3.1 Notes: (1) Based on exchange rates as at 31 Dec 2011 (2) Comprises gross property value of REITs managed by subsidiaries & associated companies (3) Excludes capital committed forprojects pending completion (4) Revenue base for real estate management services fee computation 5
REVENUE & NET PROFIT HISTORY Strong track record of profitability and growth Revenue Net Profit (S$m) Recurrent management fees (S$m) 140 Acquisition & performance fees 80 Other income 122.8 120 112.5 70 Net Profit 63.8 68.2 100 80 60 62.1 70.0 86.3 60 50 40 30 34.0 36.7 48.3 40 27.6 31.3 20 13.4 13.5 20 10 0 0 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 6
DIVIDEND HISTORY Proposed final dividend of S$0.027 per share, S$0.050 per share for FY2011 Dividend Per Share (Period) Dividend Per Share (FY)* (S$) 0.030 (S$) (Proposed) 0.070 0.066 0.027 0.025 0.020 0.019 # 0.022 0.022 0.023 0.025 0.023 0.025 0.023 0.060 0.050 0.044 0.048 0.058 0040 0.040 0038 0.038 0.015 0.030 0.010 0.020 0.005 0.010 0.000 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 0.000 FY07 FY08 FY09 FY10 FY11 # pro rated * computed based on 582,060,000 shares at listing date, excluding the shares allotted under the 1 for 5 bonus issue in May 2010 and the 1 for 10 bonus issue in June 2011 1 for 5 bonus issue 1 for 10 bonus issue 7
REGIONAL PRESENCE Established regional network Beijing Dalian Tianjin Nanjing Shanghai Guangzhou Hong Kong Established regional network spanning 11 cities in the Asia Pacific, including 6 cities in the PRC Mainland Kuala Lumpur Malacca Singapore Melbourne 8
MANAGEMENT TEAM Experienced team with a proven track record Group John Lim Public Market John Lim Private Market Ng Beng Tiong Principal Investments Moses Song Management Services Corporate Finance Advisory Services Corporate Divisions Suntec REIT Yeo See Kiat ADF I Ng Beng Tiong ARA CIP Derek Lai Senior Portfolio Manager APM Property Mgmt Anthony Yip / Susan Sim Deputy Chairman / ARA Financial Low Poh Choo Senior Director Finance & Compliance Cheryl Seow Senior Director, Group Finance Fortune REIT Anthony Ang ADF II Paul Yi Australia Desk Moses Song Head Suntec Singapore Pieter Idenburg Corporate Office Ng Beng Tiong Director Prosperity REIT Mavis Wong Acting ARA Harmony Fund Siew Siew Hoon Director India Desk Suntec International Pieter Idenburg Corp Business Dev Moses Song Director Cache Logistics Trust Daniel Cerf China Desk Mun Hon Pheng Head Japan Desk Group Risk Mgmt & IA Tang Boon Kang Senior Manager AmFIRST REIT Lim Yoon Peng GCC Desk Group HR & Corp Dev Pauline Lim Senior Manager Hui Xian REIT Stephen Chu Group Office Admin Serene Yeo Senior Manager
AWARDS & ACCOLADES Sterling recognition of ARA s commitment to excellence & corporate governance ARA is one of the six Singapore s companies to be selected as Asia s 200 Best Under A Billion by Forbes Asia in September 2011. Based on the 2010 list of eight Singapore companies selected, ARA is the only one to retain its spot this year ARA has recently been recognized as a Business Superbrands in Singapore, a strong testament to ARA s excellent branding and recognition locally and abroad ARA was awarded the inaugural Internal Audit Excellence Award (Merit, Overall Category) at the Investors Choice Awards 2011, organized by the Securities Investors Association of Singapore (SIAS) 10
2. FINANCIAL RESULTS
FINANCIAL HIGHLIGHTS FY2011 net profit jumped 7% to S$68.2m Financial Highlights FY2011 FY2010 Change (%) Revenue Management fees (1) (S$ 000) 90,860 84,630 7% Acquisition and performance fees (2) (S$ 000) 21,288 17,499 22% Other income (3) (S$ 000) 10,613 10,382 2% Total Revenue (S$ 000) 122,761 112,511 9% ( ) Operating Profit (Pre Tax) (S$ 000) 73,966 73,944 0% Share of Profit of Associates (S$ 000) 2,794 456 513% Net Profit (S$ 000) 68,202 63,812 7% EPS (4) (S cents) 8.88 8.31 7% AUM (S$ billion) 20.2 17.1 19% Notes: (1) Recurrent management fees from REITs, private real estate funds and real estate management services (2) Primarily REIT acquisition fees and private real estate fund arrangement/performance fees (3) Comprises mainly distribution income from financial assets (4) Based on 768,319,189 shares in issue following the 1 for 10 bonus issue in June 2011 12
REVENUE BREAKDOWN Strong net profit growth of 15% Y-O-Y excluding mark-to-market adjustment S$m 75 70 65 60 55 Net Profit 63.8 + 7% yearon year Net Profit 68.2 Net profit rose 7% to S$ 68.2 million, boosted by: i. Full year contribution of Suntec REIT s acquisition of a onethird interest in Marina Bay Financial Centre Towers 1 & 2, the 73.33 Marina Bay Link Mall and 695 car park lots (the MBFC Property ) on 9 December 2010 ii. Performance fees of S$18.5 million received from the divestment of the entire equity interest in ARA Harmony Fund by its private investors at an overall internal rate of return of f k 64.8% Included in the net profit for FY2011 was an accounting adjustment of mark to market loss of S$6.1 million on the Suntec REIT acquisition units received by the Group for the acquisition of + 8% excluding impact of markto market adjustment of certain REIT units and related tax effects FY2010 FY2011 FY2011 (A) the MBFC Property. These acquisition units were subject to a one year moratorium as stipulated in the Collective Investment Schemes issued by the Monetary Authority of Singapore Excluding the effects of this mark to market adjustment and the related tax effects, the Group s net profit would have been S$73.3 million, 15% higher than that achieved in FY2010 13
BALANCE SHEET Robust balance sheet Group bl balance sheet as at 31 Dec 2011 S$ 000 S$ 000 Non current assets Non current liabilities Plant and equipment 1,360 Financial liabilities 268 Tenancy deposits 502 Deferred tax liabilities 117 Associates 3,100 Financial assets 96,920 101,882 385 Current assets Current liabilities Financial assets 24,764 Trade and other payables 17,343 Trade and other receivables 30,616 Financial liabilities 120 Cash and cash equivalents 57,291 Derivative Liabilities 717 Current tax payable 6,427 112,671 24,607 Total liabilities 24,992 Shareholders equity 189,561 Total assets 214,553 Total liabilities & shareholders equity 214,553 14
3. STRATEGY
STRATEGY Poised for the next phase of growth REITs Work with various partners to launch new REITs in new sectors and geographies Existing REITs to continue to focus on asset enhancements and acquisitions Private Real Estate Funds Asset management and divestment of properties for ADF Capital commitments of US$400 million for ADF II, targeting for final close in 2012 Real Estate Management Services Support REITs and private real estate funds and increase properties under management Leverage on the Suntec brand to expand geographical reach ofconvention services 16
DISCLAIMER These slides may contain forward looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward looking statements as a result of a number of uncertainties, risks and assumptions. Representative examples of these factors include but are not limited to general market and economic conditions, interest rate trends, competition from other real estate investors, changes in operating expenses including employee wages and benefits, changes in government policies, and the continued availability of financing in the amounts and terms necessary to support future business. You are cautioned not to place undue reliance on the forward looking statements in these slides, which are based on the current view of management on future events. Information from external sources in these slides has not been independently verified by us nor have the external sources quoted consented to the inclusion of the information. Contact Cheryl Seow Senior Director, Group Finance cherylseow@ara.com.hk Global l Headquarters: 6 Temasek Boulevard Suntec Tower Four, #16 02 Singapore 038986 Tel: (65) 6835 9232 Fax: (65) 6835 9672 Website: www.ara asia.com