Yearly Financial Highlights

INTERIM FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 30 JUNE 2025

Financials Archive

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Balance Sheet

		Group 30/06/25 S$'000	Group 31/12/24 S$'000
Current assets
Trade and other receivables		6,173	8,632
Financial derivatives		27,753	32,724
Cash and cash equivalents		49,043	29,471
Asset held for sale		5,825	-
		88,794	70,827
Non-current assets
Investment properties		2,516,563	2,464,764
Interests in subsidiaries		-	-
Trade and other receivables		-	-
Financial derivatives		15,643	15,556
		2,532,206	2,480,320
Total assets		2,621,000	2,551,147
Current liabilities
Trade and other payables		32,063	40,356
Current portion of security deposits		479	472
Lease liabilities		15	15
Loans and borrowings		26,994	17,797
		59,551	58,640
Non-current liabilities
Financial derivatives		11,284	677
Non-current portion of security deposits		16,318	16,058
Lease liabilities		2,047	2,054
Loans and borrowings		898,421	866,243
Deferred income		1,279	1,279
Deferred tax liabilities		37,810	36,244
		967,159	922,555
Total liabilities		1,026,710	981,195
Net assets		1,594,290	1,569,952
Represented by:
Unitholders' funds		1,594,290	1,569,952
Units in issue (‘000)		652,420	652,371
Net asset value per unit ($)		2.44	2.41

Review of Performance

Summary of Parkway Life REIT's Results for the half year ended 30 June 2025

	Note	1H 2025 S$'000	1H 2024 S$'000	Inc/ (Dec) S$'000	Inc/ (Dec) %
Gross Revenue		78,308	72,420	5,888	8.1
Net Property Income		73,844	68,355	5,489	8.0
Distributable Income to Unitholders	(a)	49,923	45,609	4,314	9.5
Distribution per unit based on Distributable Income to Unitholders (cents)	(b)	7.65	7.54	0.11	1.5
Annualised distribution per unit (cents)		15.30	15.08	0.22	1.5
Distribution yield (%), based on - Closing market price of $4.10 as at 30 June 2025		3.73	3.68		1.5

Note:

1. Net of amount retained for capital expenditure on existing properties amounting to $3.0 million each year.
2. In computing the Distribution per Unit ("DPU"), the number of units in issue as at the end of each period is used.

Consolidated Statements of Total Return

1H 2025 Vs 1H 2024

Gross revenue for 1H 2025 had increased by 8.1% year-on-year to $78.3 million. The increase was due to the contribution from one Japan nursing home acquired in August 2024 and eleven France nursing homes acquired in December 2024, partially offset by the depreciation of the Japanese Yen and lower rent collected from a defaulting operator of the Japan nursing home properties. Correspondingly, the net property income had increased by 8.0% to $73.8 million for 1H 2025.

The Manager's management fees for 1H 2025 of $7.8 million was 9.2% higher than 1H 2024 largely attributed to the higher net property income and the enlarged deposited property value from acquisitions in 2024. Higher trust expenses were registered for 1H 2025 due to higher professional fees and Manager's travelling costs incurred during the period.

Of the net foreign exchange movement, the Group had registered a realised foreign exchange gain amounting to about $4.3 million and $4.7 million from the settlement of Japanese Yen forward contracts in 1H 2025 and 1H 2024 respectively.

Finance costs had increased mainly due to funding of capital expenditure and Japan acquisition in 2024 as well as higher interest costs from the Japanese Yen debts partially offset by depreciation of JPY. Notwithstanding, interest cost on loans drawn down to fund capital expenditure has no distribution impact as they are not subject to deduction when computing distributable income to Unitholders. Interest income mainly arose from the EUR cross currency swap and fixed deposit placement.

The Group has step-up lease arrangements for certain of its properties which include the 20.4-year master lease agreements for its three Singapore hospitals, the 20-year lease agreements for the three Japan nursing home properties and the 12-year lease agreements for the eleven France nursing home properties. As part of revenue recognition, the step-up lease arrangements were accounted on a straight line basis over the lease term (i.e. effective rent). This had led to corresponding increase in the gross revenue and investment properties in the initial years of lease. As property valuation is based on discounted cash flow method which deviates from effective rent accounting treatment, the Group has removed the impact of effective rent from investment properties accordingly. This resulted in adjustments in the net change in fair value of investment properties (See Note 3 to the Financial Statements). The step-up lease arrangements contributed to the higher distributable income in 1H 2025 as compared to 1H 2024.

At the reporting date, the Group had outstanding forward exchange contracts ("FEC") with aggregate notional amounts of approximately $135.1 million, comprising JPY FEC of $90.2 million and EUR FEC of $44.9 million to hedge the net income from Japan and France up to Q1 2029 and Q1 2030 respectively. The change in fair value of $5.4 million loss was charged to the statement of total return.

Income tax expenses in 1H 2025 included the tax provision for interest income arising from loans to subsidiaries in relation to the France acquisition.

Overall, annualised DPU for 1H 2025 of 15.30 cents had outperformed by 1.5% or 0.22 cents as compared with 1H 2024's annualised DPU of 15.08 cents.

Consolidated Statements of Financial Position

Lower trade and other receivables as of 30 June 2025 was mainly due to the receipt of rent receivables for the Japan properties.

The asset held for sale relates to the divestment of Malaysia properties as announced on 21 April 2025³.

The increase in investment properties was mainly due to the capital expenditure work done for 1H 2025 and appreciation of Japanese Yen and European Euro, partially offset by the reclassification of Malaysia properties to asset held for sale.

Lower trade and other payables were mainly due to settlement of Manager's performance fees for the financial year ended 31 December 2024, acquisition fees in relation to the France acquisition and capital expenditure for Mount Elizabeth Hospital ("MEH").

Increase in loans and borrowings was due to the additional drawdown of JPY1,017 million (approximately $8.9 million) and $22.4 million of SGD loans for funding of capital expenditure and working capital purposes, accompanied by the appreciation of Japanese Yen.

Consolidated Statement of Cash Flows

Net cash from operating activities in 1H 2025 was mainly contributed by rental income from the properties net of property and other operating expenses.

Net cash outflow on purchase of investment properties (including acquisition-related costs) was as follows:

The acquisition-related costs paid in 1H 2025 were in relation to the nursing home properties acquired in August 2024 and December 2024.

Net cash used in investing activities as of 1H 2025 mainly related to the payment of capital expenditure on existing properties and the Renewal Capex Works for MEH.

Net cash generated from financing activities in 1H 2025 was mainly related to the net drawdown of borrowings, partially offset by payment of distributions to Unitholders.

Commentary

Amid ongoing macroeconomic uncertainties, including geopolitical tensions, persistent conflicts in Ukraine and the Middle East, and volatile trade dynamics, Parkway Life REIT continues to benefit from the defensive characteristics of its healthcare-focused portfolio across key markets in Singapore, Japan and France. The healthcare and aged care industries remain resilient, with demographic trends that support long-term growth. Parkway Life REIT's portfolio, composed of high-quality assets, is well-aligned with the growing demand for healthcare services. With about 68.0% of rental income tied to CPI-based revisions, the Group is well-hedged against inflation, ensuring a stable and defensive revenue stream even amid economic challenges.

As at 30 June 2025, the REIT maintains a healthy gearing ratio of 35.4% and interest cover of 9.1 times. To date, with about 97% of its borrowings on fixed rates, the Group has significantly mitigated exposure to rate fluctuations, providing predictability for debt servicing. Additionally, it manages foreign currency risks through Japanese Yen and EUR forward contracts, protecting its income from Japan and France portfolios.

The healthcare industry will remain critically essential in a rapidly aging population underpinning greater demand for better quality healthcare and aged care services. Parkway Life REIT's portfolio of assets places it in a good position to benefit from this continuous growth of the healthcare Industry. Going forward, Parkway Life REIT will continue to focus on driving resilient returns backed by solid financial management to create greater value for its unitholders.

³ Please refer to announcement, Divestment of Strata Units and Lots in Malaysia, dated 21 April 2025.