Filinvest REIT matches all-time low dividend

Filinvest REIT [FILRT 3.05 ?1.7%; 29% avgVol] [link] declared a Q2/24 dividend of P0.062/share, payable on September 6 to shareholders of record as of August 23. The dividend is the same as the one it declared in Q1/24, so it maintains the REIT’s annualized return of 8.13% based on the previous closing price. The total amount of the dividend is P303 million, which is 102% of the P297 million in distributable income that FILRT reported for the quarter. Relative to FILRT's IPO price, the dividend increased FILRT's total stock and dividend return to -40.67%, up from its pre-dividend total return of -41.56%. FILRT’s stock price is up 18% year-to-date.

MB BOTTOM-LINE: FILRT’s Q2 dividend was the lowest in company history, and they needed to distribute more than 102% of their distributable income this quarter just to match that all-time low amount. FILRT’s cumulative distribution ratio is now 101% through two quarters, which means that FILRT will give out more money per share in H1/24 than it earned in distributable income. The imbalance is not massive, but the Gotianuns are not in the business of giving away money, so the analysis can go one of two ways: (1) the company is maintaining this unnaturally high dividend rate to ride out what it feels will be a temporary “low”, or (2) the dividend amount will likely come down in future quarters to accommodate the REIT’s lower levels of income. While we don’t have FILRT’s Q2 Quarterly Report yet, it did put out a press release to accompany this dividend declaration where it said that its H1 revenues were down 11% y/y due to a “temporary drop in occupancy in Q1”, but that this was “partially offset by the 3.1 percent drop in costs and expenses.” So with FILRT’s occupancy up from 79% in Q1 to 81% now at the end of Q2, which of the two ways is more likely? Is H1 and the associated all-time low dividends just a temporary setback, or is it just another point on an 18-month trendline of declining dividends pointing to future dividends that could be even lower?

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