Daiwa cuts Accordia Golf Trust forecasts after fiscal 4Q results missed forecasts

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Daiwa lowered its distribution per unit (DPU) forecasts for Accordia Golf Trust by 8-9 percent for fiscal 2020-21 after its fiscal fourth quarter results missed the investment bank’s forecasts.

Accordia Golf Trust reported Tuesday its fiscal fourth quarter net loss widened to 18.5 billion yen (S$232.82 million or US$169 million), from a loss of 2.88 billion yen in the year-ago period, on impairment losses at certain golf courses.

“Excluding the impairment charges, we estimate its operating profit was marginally lower than our forecast as operating expenses were c.4 percent higher than our forecast,” Daiwa said in a note Wednesday.

Daiwa added the fourth quarter DPU of 0.18 yen was 80 percent below its forecast, largely on increased cash outflows for “reserved items,” which included additional cash for withholding tax, property tax and trust operations.

The investment bank cut its target price on Accordia Golf Trust to S$0.69 from S$0.73, but kept a Buy call.

“We believe valuations still look undemanding and we expect further operational improvements and DPU growth for FY20-21,” the note said.

The investment bank estimated “attractive” DPU yields of 8.5 percent to 9.8 percent for fiscal 2020-21.

The unit was down 0.85 percent at S$0.58 at 1:04 P.M. SGT.

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